THE FOREIGN TRADE POLICY 2015-2020 – HIGHLIGHTS

A.            
SIMPLIFICATION
& MERGER OF REWARD SCHEMES

Export from
India Schemes:

1.            
Merchandise
Exports from India Scheme (MEIS)

(a)         
Earlier there were
5 different schemes (Focus Product Scheme, Market Linked Focus Product Scheme,
Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) for rewarding
merchandise exports with different kinds of duty scrips with varying conditions
(sector specific or actual user only) attached to their use. Now all these
schemes have been merged into a single scheme, namely Merchandise Export from
India Scheme (MEIS) and there would be no conditionality attached to the scrips
issued under the scheme. The main features of MEIS, including details of
various groups of products supported under MEIS and the country groupings are
at Annexure-1.

(b)         
Rewards for export
of notified goods to notified markets under ‘Merchandise Exports from India Scheme
(MEIS) shall be payable as percentage of realized FOB value (in free foreign
exchange). The debits towards basic customs duty in the transferable reward
duty credit scrips would also be allowed adjustment as duty drawback. At
present, only the additional duty of customs / excise duty / service tax is
allowed adjustment as CENVAT credit or drawback, as per Department of Revenue
rules. 

2.            
Service Exports from India
Scheme (SEIS)

(a)         
Served From India
Scheme (SFIS) has been replaced with Service Exports from India Scheme (SEIS). SEIS
shall apply to ‘Service Providers located in India’ instead of ‘Indian Service
Providers’. Thus SEIS provides for rewards to all Service providers of notified
services, who are providing services from India, regardless of the constitution
or profile of the service provider. The list of services and the rates of
rewards under SEIS are at Annexure-2. 

(b)         
The rate of reward
under SEIS would be based on net foreign exchange earned. The reward issued as
duty credit scrip, would no longer be with actual user condition and will no
longer be restricted to usage for specified types of goods but be freely
transferable and usable for all types of goods and service tax debits on
procurement of services / goods. Debits would be eligible for CENVAT credit or
drawback.   

3.            
Chapter -3
Incentives (MEIS & SEIS) to be available for SEZs

It is now proposed
to extend Chapter -3 Incentives (MEIS & SEIS) to units located in SEZs
also.

4.            
Duty credit
scrips to be freely transferable and usable for payment of custom duty, excise
duty and service tax.

(a)         
All scrips issued
under MEIS and SEIS and the goods imported against these scrips would be fully
transferable.

(b)         
Scrips issued under
Exports from India Schemes can be used for the following:-

(i)               
Payment of customs
duty for import of inputs / goods including capital goods, except items listed
in Appendix 3A.

(ii)             
Payment of excise
duty on domestic procurement of inputs or goods, including capital goods as per
DoR notification.

(iii)           
Payment of service
tax on procurement of services as per DoR notification.

(c)          
Basic Customs Duty
paid in cash or through debit under Duty Credit Scrip can be taken back as Duty
Drawback as per DoR Rules, if inputs so imported are used for exports.

5.            
Status Holders

(a)         
Business 
leaders  who  have 
excelled  in international trade and have successfully
contributed to country’s foreign trade are proposed to be recognized as Status
Holders and given special treatment and privileges to facilitate their trade
transactions, in order to reduce their transaction costs and time.  

 (b)         
The nomenclature of
Export House, Star Export House, Trading House, Star Trading House, Premier
Trading House certificate has been changed to One, Two, Three, Four, Five Star
Export House.

(c)          
The criteria for
export performance for recognition of status holder have been changed from
Rupees to US dollar earnings. The new criteria is as under:-