Vijay C Roy
Tribune News Service
Chandigarh, September 30
Engineering exporters of the region have sought an early disbursal of benefits under the Merchandise Exports from India Scheme (MEIS) as they are facing liquidity shortage. The delay in the disbursal of benefits has hit small and medium-scale exporters more than their bigger counterparts.
“The exporters are yet to receive benefits under the MEIS since April. In a scenario when the exports are dwindling, the blockage of essential capital has hit the bottom lines of the exporters,” said SC Ralhan, president, Ludhiana Hand Tools Association.
According to the exporters, at this juncture when exporters are getting orders from new customers, the government must disburse benefits at the earliest so that they could execute the orders. In the absence of liquidity, many exporters are not in a position to meet export obligations, they said.
Introduced in April 2015, the MEIS objective is to offset infrastructural inefficiencies and associated costs involved in exports of goods and products, which are produced or manufactured in India, especially those having high export intensity, employment potential and thereby enhancing India’s export competitiveness.
The MEIS entitlement is around 3% of freight on board (FOB) for engineering exports to notified exports markets.
The scheme will be wound up by December 31, and the government has already announced the Remission of Duty or Taxes on Export Products (RoDTEP) scheme to replace the MEIS.
Earlier, the Comptroller and Auditor General of India had said “substantial delays” in issuing benefits under two key flagship schemes, namely MEIS and Services Export from India Scheme (SEIS), and for goods and services exports indicate “failure of the automated system” in achieving the objective of simplification of procedures and ease of doing business.
According to the exporters, due to the delay in refunds they have to seek additional borrowing from banks which is not a viable proposition especially when working capital is stuck in the form of refunds.