Short answer: The Merchandise Exports from India Scheme (MEIS) no longer applies to current exports. It was withdrawn for exports made from 1 January 2021 and replaced by the Remission of Duties and Taxes on Exported Products scheme (RoDTEP). Exporters now claim RoDTEP through the shipping bill, receive the benefit as a transferable duty credit e-scrip, and use it to pay customs duty or sell it to other importers.
What was MEIS?
MEIS was an export incentive under the Foreign Trade Policy 2015–20. Exporters of notified goods to notified markets received duty credit scrips worth a percentage of the free-on-board value of their exports. The scheme was challenged as an export subsidy under WTO rules, and the government replaced it with a scheme designed to refund embedded taxes rather than reward exports.
MEIS scrips relating to exports made before the scheme ended were handled under the transition rules issued at the time. If you still have pending MEIS claims or unused scrips, review their status and validity with your adviser.
What is RoDTEP?
RoDTEP refunds duties, taxes and levies that are built into the cost of exported goods but are not refunded under any other mechanism, such as duty on fuel used in transport, electricity duty, mandi tax and stamp duty on export documents. The aim is that Indian goods are exported without these hidden taxes.
- Rates: notified product by product (by tariff line) by the government, generally as a percentage of FOB value, often with a value cap per unit.
- Claim: made by declaring the RoDTEP claim in the shipping bill at the time of export.
- Benefit: issued as a duty credit e-scrip in the exporter's electronic ledger on the customs (ICEGATE) system.
- Use: the e-scrip can be used to pay basic customs duty on imports, or transferred to another importer.
Who can claim RoDTEP?
RoDTEP covers exports of notified goods. Coverage, rates and eligibility of particular categories, such as exports by advance authorisation holders, EOUs and SEZ units, have been changed by notification more than once since the scheme began. Before relying on RoDTEP in your pricing, check the current schedule for your product and your type of unit.
Practical points for exporters in Kerala
- Check the RoDTEP rate and value cap for each product's tariff line before quoting export prices.
- Make sure the RoDTEP declaration is made in the shipping bill. A missed declaration is difficult to correct later.
- Reconcile e-scrips issued with the shipping bills filed, and track their use or transfer in your books.
- Account for RoDTEP correctly as export incentive income, and consider the GST and income tax treatment of scrips that are sold.
- Seafood, spices, coir, cashew, rubber and other Kerala export sectors should review the rates applicable to their specific products, which differ widely.
Frequently asked questions
Is MEIS still available?
No. MEIS was withdrawn for exports from 1 January 2021 and replaced by RoDTEP.
How is RoDTEP different from drawback?
Duty drawback refunds customs and central excise duties on inputs used in exported goods. RoDTEP covers other embedded taxes and levies that are not refunded under drawback or GST. An exporter may be eligible for both on the same goods.
Can RoDTEP e-scrips be sold?
Yes. RoDTEP e-scrips are transferable and can be sold to importers who use them to pay customs duty.
Does RoDTEP apply to services?
No. RoDTEP applies to exports of goods. Service exporters, including IT companies, should look at GST refunds on zero-rated exports instead.
How we can help
A. George & Associates advises exporters across Kerala on export incentives, GST refunds on exports and the accounting of scrips. See our GST consultants in Kochi page or contact us.
This article is for general information. Scheme rates, coverage and procedures are amended by notification; please confirm the current position before acting.