Engineering Exporters Approach Commerce Minister for Urgent Restoration of MEIS Benefits
EEPC India has approached the Commerce and Industry Minister Mr Piyush Goyal, seeking his intervention for restoration of benefits for exporters under the MEIS scheme, stopped by the Revenue Department.
''Exporters do factor in external volatility and can often sense such changes. What is difficult for them to factor in is sudden internal policy changes and especially those which have retrospective effect. Exporters have priced in their MEIS benefit after the Government announced that MEIS benefit will be extended till December 31, 2020. And now suddenly to stop it will have an extreme adverse impact on exporters' ability to survive in these difficult conditions, '' EEPC India Chairman Mr Mahesh K Desai stated in his letter to the Commerce and Industry Minister.
Mr Desai said engineering exporters work on long term contracts and '' such retrospective changes '' have a debilitating impact particularly on MSME exporters.
EEPC India is the apex body of engineering exporters who contribute 25 per cent of the country's total exports. Highly employment-oriented in nature, the engineering exports are reeling under the impact of the global pandemic. Engineering exports have sharply dropped by over 31 per cent to USD 13.61 billion in the first quarter of the current fiscal from USD 19.84 billion for the April-June period of 2019-20.
Mr Desai pleaded with the Commerce and Industry Minister for resumption of the MEIS benefits, stating that the scheme '' has played an invaluable part in not only maintaining our exports globally but also in diversifying our exports market. Furthermore, the MEIS scheme has neutralized some of the taxes and para taxes embedded in the production of exported goods and hence it is in some sense a legitimate quasi refund of taxes''.
He said the MEIS should not be stopped without replacing it with the alternative scheme of RODTEP. The exports performance depends upon a number of factors including external demand, relative currency depreciation vis-a-vis competing countries; logistical and other transaction costs, compared to competitors like China. MEIS benefit has significantly helped Indian engineering exporters maintain their competitiveness. This is more so, since over 90 per cent of the engineering exports are either low or medium value added products.