NEW DELHI: Union Finance Minister Nirmala Sitharaman on Tuesday said that in a bid to boost exports, the Central government has taken several steps including a tax refund scheme and enhanced credit to exporters. In her reply during a budget-related debate in Rajya Sabha, Sitharaman also said that the pending Goods and Services Tax compensation to states will be paid in two installments.
Listing specific steps taken to improve India’s exports, the finance minister said that the existing Merchandise from India Scheme (MEIS) will be replaced with the Remission of Duties or Taxes on Export Product (RoDTEP) scheme, as MEIS was widely deemed as non-compliant with global trade rules.
“I am making it plain that RoDTEP, which is now coming in, will adequately compensate and incentivise exporters… more than all the existing schemes put together,” Sitharaman said.
The Federation of Indian Export Organisations (FIEO) had on Monday complained that Rs 6,000 crore worth of refunds for apparel and made-ups exporters have been blocked under MEIS and the RoSCTL (Rebate of State and Central Taxes and Levies) scheme. The exporters have not received any refunds between March 7 and August 1, 2019 , due to which they are facing an “acute” liquidity problem, it said.To add to the trouble, the exporters had complained, the Directorate General of Foreign Trade is now demanding the refund of MEIS paid between March 7 and July 31 last year. “This is not only unfair but also legally untenable because the policy, once announced, cannot be changed retrospectively,” FIEO said in a statement, asking the Centre to intervene in the issue as most exporters are on the verge of closure and defaults.
Sitharaman on Tuesday assured that concerns raised over withdrawal of MEIS are being addressed.
She also said that in order to boost credit to export sectors, the Reserve Bank of India has enhanced the sanctioned limit to the eligible under priority lending norms.
“The limit has been raised from Rs 25 crore to Rs 40 crore per borrower. Furthermore, the existing criterion of units having a turnover of up to Rs 100 crore has been totally removed. So, it is applicable to anybody who wants to approach and take this priority sector lending,” she said. The government has also announced Niryat Rin Vikas Yojana to provide enhanced insurance cover and reduce premium for small exporters.