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India plans new export promotion scheme

May '19
India plans new export promotion scheme
India is reportedly planning an export promotion scheme to ensure expeditious refund of central and state taxes and levies to boost shipments and tackle global challenges to trade. Part of a 100-day action plan prepared by the commerce ministry for the new government that takes over on May 30, the scheme may be named Central and State Taxes and Levies Scheme.

The need for a new export promotion scheme was felt as the United States has been opposing the existing merchandise exports for India (MEIS) scheme at the World Trade Organisation (WTO), saying it is not in compliance with global trade norms, a news agency reported quoting an anonymous top government official.

The new scheme would ensure refund of all un-rebated central and state levies and taxes imposed on inputs that are consumed in exports of all sectors.

The major un-rebated levies are state value-added tax (VAT) and central excise duty on fuel used in transportation, captive power, farm sector; mandi tax; duty of electricity; stamp duty on export documents, purchases from unregistered dealers; embedded central goods and services tax (CGST) and compensation cess coal used in the production of electricity.

The ministry has also proposed to introduce a WTO-compliant production-based support scheme to increase outbound shipments. The department of commerce is consulting with all the concerned stakeholders to frame this scheme to promote high potential sectors like technical textiles, electronics, telecom, hi-tech engineering, medical devices and pharmaceuticals.

Any government support which is subject to export performance becomes a prohibited subsidy under WTO norms.

The ten-point action plan has also proposed the launch of a new five-year foreign trade policy (2020-25) on September 1 this year and promote shipments of the services sector. The current policy will end in March 2020.

The other proposals include resolution of WTO issues like on agriculture sector; steps to revive special economic zones (SEZs), implementation of agriculture export policy; disbursal of funds under Trade Infrastructure for Export Scheme and promotion of Government e-marketplace (GeM) portal for public procurement. (DS)

Fibre2Fashion News Desk – India

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