Wait...

Online Export Import Data Search

Recent Searches: No Recent Searches
Complete Training Video : Click Here

Export subsidy programme to be phased out to meet WTO norms.


Date: 10-06-2019
Subject: Export subsidy programme to be phased out to meet WTO norms
With countries like the US having challenged India’s export subsidy programmes at the World Trade Organization (WTO), the government is considering phasing out the flagship Merchandise Exports from India Scheme (MEIS), possibly over the next two-three years. Instead, it will roll out WTO-compliant schemes that will offset both state and central levies on inputs consumed in exports, two sources who attended a marathon meeting chaired by new commerce and industry minister Piyush Goyal on June 6, told FE.

Already, a scheme for the remission of state and central levies has been implemented in garments and made-up exports; this will be expanded gradually to include all key sectors. The next foreign trade policy (FTP), which will kick in from April 2020, will likely see the revamped architecture of various export schemes. Currently, the government’s potential revenue forgone on account of MEIS is estimated at Rs 30,810 crore a year.

“The basic idea is to keep exports zero-rated in accordance with the best global practices, while ensuring that all our schemes remain fully WTO-compliant,” said one of the sources. As for the remission of state levies for garment and made-up exports, the government allocated Rs 3,664 crore in FY19. However, the compensation level under this scheme was expanded in March to include central levies as well; even some embedded taxes were factored in. So the potential revenue forgone is now estimated at around Rs 6,300 crore annually.

However, government officials have made it clear that the entire allocation or potential revenue forgone on account of various such schemes (including MEIS and duty drawback) doesn’t qualify as export subsidies, as in most cases, they are meant to only soften the blow of imposts that exporters have been forced to bear due to a complicated tax structure.MEIS was announced in the current FTP in 2015 by merging five different schemes.

Under this, the government provides exporters, especially in the labour-intensive sectors, duty credit scrip at 2-5% of their export turnover, depending upon products and shipment destinations. Though the goods and services tax (GST) regime has subsumed a plethora of levies, some still remain (petroleum and electricity are still outside the GST ambit, while other levies like mandi tax, stamp duty, embedded central GST and compensation cess etc remain unrebated).

The US has dragged India to the WTO, claiming that New Delhi offered illegal export subsidies and “thousands of Indian companies are receiving benefits totaling over $7 billion annually from these programmes”. Indian officials have rejected such claims. However, to prepare exporters, Goyal last week asked industry to stop relying on “crutches of subsidies” and improve competitiveness.

According to the special and differential provisions in the WTO’s Agreement on Subsidies and Countervailing Measures, when a member’s per capita gross national income (GNI) exceeds $1,000 per annum (at the 1990 exchange rate) for a third straight year, it has to withdraw its export subsidies. According to a WTO notification in 2017, India crossed the per-capita GNI threshold for three straight years through 2015 — to $1,178 in 2015 from $1,051 in 2013.

However, India has argued that just like some others who were granted eight years to scrap export subsidies, it, too, deserves such a time frame to do so. Seeking incentives to stay competitive, exporters have also long complained about India’s elevated logistics costs and inflexible labour norms, and also cried hoarse over a ‘strong rupee’. India’s logistics costs make up for as much as 15-16% of the consignment value (against 10% in developed countries), according to a paper by Bibek Debroy and Kishore Desai.

India’s export growth has remained subdued at an average of just 3.2% in the past six months through April and the new government is seeking to contain any fallout of the global trade war on outbound shipments.

Source: financialexpress.com

Get Sample Now

Which service(s) are you interested in?
 Export Data
 Import Data
 Both
 Buyers
 Suppliers
 Both
OR
 Exim Help
+


What is New?

Date: 21-10-2020
Notification No. 38/2020-Customs
Notification regarding exemption of duties of Customs against scrips issued under the RoSL scheme for apparel and made-ups sectors.

Date: 21-10-2020
Notification No. 07/2020 – Central Excise
Notification regarding exemption of duties of Central Excise against scrips issued under the RoSL scheme for apparel and made-ups sectors

Date: 20-10-2020
Notification No. 37/2020-Customs
Seeks to further amend notification no. 152/2009 dated 31.12.2009, regarding the rate of duty of customs on imports of "Polybutadiene Rubber" originating in Korea RP and imported under the India-Korea Comprehensive Economic Partnership Agreement.

Date: 15-10-2020
Notification No. 99/2020 - Customs (N.T.)
Exchange rate Notification No.99/2020-Cus (NT) dated 15.10.2020- regd.

Date: 13-10-2020
Trade Notice No. 30/2020-2021-DGFT
Electronic filing and Issuance of Preferential Certificate of Origin (CoO) for India’s Exports under GSP, GSTP, India-Malaysia CECA, India-Singapore CECA w.e.f. 15th October 2020

Date: 09-10-2020
Notification No. 39/2015-2020
Amendment in Export Policy of Onions

Date: 08-10-2020
Circular No. 44/2020-Customs
Procedure for inspection of ICDs/CFSs/AFSs -reg

Date: 08-10-2020
Notification No. 49/2020-Customs (N.T./CAA/DRI)
Appointment of CAA by Pr. DGRI

Date: 07-10-2020
Public Notice No.24 /2015-20
Revision of SION H-68, H-301 & H-302 of Export Products- Double Decorative/Single side Laminates with or without Barrier Paper

Date: 06-10-2020
Instruction No. 18/2020-Customs
Directorate General of Audit as a Nodal Directorate for Customs Post Clearance Audit –regarding



Exim Guru Copyright © 1999-2020 Exim Guru. All Rights Reserved.
The information presented on the site is believed to be accurate. However, InfodriveIndia takes no legal responsibilities for the validity of the information.
Please read our Terms of Use and Privacy Policy before you use this Export Import Data Directory.

EximGuru.com

C/o InfodriveIndia Pvt Ltd
F-19, Pocket F, Okhla Phase-I
Okhla Industrial Area
New Delhi - 110020, India
Phone : 011 - 40703001