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The mid-term overview of the Foreign Trade Policy (2015-20) has had in additional relief worth ?8,450 crore annually for the labour-intensive and micro, small and medium enterprises (MSME) sectors. Exporters of labour-intensive items, such as for instance leather and footwear, agriculture and marine products, handmade carpets, telecom and electronics components, and medical and surgical equipment, will now qualify for 2 per cent higher incentives across-the-board underneath the popular Merchandise Export from India Scheme (MEIS), under the review released by Commerce and Industry Minister, Suresh Prabhu on Tuesday.

A quantity of services such as for example accountancy, architecture, legal, education and restaurant, too, can get similar relief under the Services Export from India Scheme (SEIS). The incentives come at any given time when exporters are struggling under the Goods that is new and Tax (GST) regime introduced in July. Prabhu said the national government was dedicated to redress the issues. “It just isn't a one-time exercise but an effort that is ongoing. We're going to continuously revisit issues, identify challenges and address them on a basis that is real-time” the Minister said.

Acknowledging that exporters had suffered because of problems in GST implementation, Prabhu said the federal government would sort it out together with exporters. “No new legislation can be made perfect all at once. I ask exporters to bear with us and be our partners in dealing with the difficulties,” he said, adding that a number of problems had already been sorted out. Exporters who were upset by the drop in goods exports in October 2017, and were expecting a further fall over the next month or two due to lower duty drawback rates (of input tax reimbursement) and slow refunds, seem more optimistic now.

“The higher incentives should start reflecting in export numbers from January. However, we have been disappointed that a number of sectors were left out. Problems for exporters exist across sectors plus the relief should have been for all,” said Ganesh Kumar Gupta, President, FIEO. Other initiatives such as the extension of validity of MEIS scrips from 1 . 5 years to a couple of years and also the provision of zero GST on sale of scrips may help the industry in a way that is big Apparel Export Promotion Council Chairman Ashok Rajani said.

The MEIS is considered the most popular incentive for exporters, under which identified sectors are given duty exemption scrips which are fixed at a certain percentage regarding the total value of their exports. The scrips can be used to pay duties on inputs, including Customs duties. An e-wallet system to address the liquidity problem being faced by exporters will be operational from April 1, 2018, PK Das, Member, CBEC, assured exporters.

Finance Secretary Hasmukh Adhia pointed out that Input Tax Credit and IGST refunds for exporters were being expedited and stressed that the GST regime will undoubtedly be good for exporters in the run that is long. The government in addition has introduced a fresh, trust-based self-ratification system to permit duty-free inputs for export production on such basis as self-declaration.

With exports of products less than $300 billion in the last two years, the federal government is under great pressure to give the sector a major boost. Exports in 2016-17 were $276.54 billion, compared to $314.14 billion in 2013-14. The report on the FTP (2015-2020) was due earlier in 2010, but was delayed as a result of utilization of the GST in July together with problems faced by exporters beneath the new dispensation centerstage that is taking.