Govt to incentivise exporters under the IEIS scheme

The Dollar Business Bureau

The government in its Trade Notice No.16/2016 on Thursday announced it would provide benefits to those exporters who did not receive incentives under the then Incremental Export Incentivisation Scheme (IEIS) notificationNo: 3 (RE-2013)/2009-2014 when the scheme was operational.

The government had later discontinued the IEIS scheme and the same wasmerged under the Merchandise Exports from India Scheme (MEIS). The Incremental Export Incentivisation Scheme (IEIS) for Quarterly basis (01.01.2013 to 31.03.2013) was introduced vide Notification No.27 dated 28.12.2012.

The following points have been detailed under the latest notification.

1. Under the IEIS scheme, an IEC holder was entitled for 2% duty credit scrip on the incremental growth during January 1, 2013 to March 31, 2013 as against the quarter January 1, 2012 to March 31, 2012 on the free on board (FoB) value of export. The scheme, however, had underlined some conditions such as the IEIS benefits was issued for processing the cases of the IEIS claims by RAs without imposing any cap on account of the earlier stipulation of restricting growth to 25% or incremental growth of Rs.10 crore in value, whichever is less.

2. The latest notification directs all the concerned RA’s to reopen the files in such cases for issue of the balance claim pending after deducting the initial Scrip value and process such cases for issuance of Scrips for the balance entitlement after ensuring taking due diligence as indicated in the Trade Notice 4/2016 dated 05.05.2016 and earlier instructions on scrutiny of claims.

3. The applicant firm is required to declare the past export performance during the base period January 1, 2012 to March 31, 2012 and March 1, 2013 to March 31, 2013.

4. The government will calculate the quantum of benefit on the incremental growth achieved. However, benefit under this scheme will not be allowed to an exporter who had made no export between January 1, 2012 and March 31, 2012.

5. In another condition, the scheme underscored that all the concerned RAs will now have facility to re-open the files in such cases for issue of the balance claim pending after deducting the initial scrip value and process such cases for issuance of scrips for the balance entitlement after ensuring taking due diligence.

6. The applicants who have purchased goods from another legal entity who is also having IEC are not entitled for benefit under the scheme on such purchases of goods. Now, since the scheme is active for a certain period, the claimants can submit their application. The claimants need to file export shipments from all EDI ports in one application while for export shipments from each Non-EDI ports in a separate application as per the guidelines dated 17.05.2013.

7. The board also noted that many of the firms have filed multiple applications showing different export performance under different file nos between January 1, 2012 to March 3, 2012. In this regard the provisions detailed are given below:

i. As per public Notice No.13 dated 17.05.2013, export shipments from all EDI ports can be filed in one application while for export shipments from each Non-EDI ports, separate application is required to be filed. Such applications have to be filed in the same RA.

ii. The applicant firm is required to declare the past export Performance during the 2011-12 (base year) and 2012-13(claim year). The applicant firm is required to declare the past export Performance during the base period (01.01.2012 to 31.03.2012) and the claim period (01.01.2013 to 31.03.2013).

iii. The Chartered Accountant is also required to certify in the Annexure to 3F, the past export performance during the base period (01.01.2012 to 31.03.2012) and the claim period (01.01.2013 to 31.03.2013).

8. The notification issued by the government also highlighted various forms of malpractices adopted by the exporters and said some of the applicants who did not have any exports during January 1, 2012 to March 3, 2012 have filed applications by mentioning export value as low as Rs. 1 just to bypass the system checks. In all such cases, the RAs shall lake necessary actions including processing of cases for placing such firms under DEL as per applicable rules/provisions for violation of the prescribed procedures and furnishing of declaration, statement and documents with false material particulars.

“RAs should also take action against such Chartered Accountants and report such fraudulent practices to the Institute of Chartered Accountants of India (ICAI),” the notification said.