Govt may save ~9,000 cr in claims under export promotion schemes

The commerce ministry may save around ~9,000 crore out of the ~56,000 crore allocated to settle pending claims for merchandise as well as service exports under various export promotion schemes.

“Our cumulative requirement will not be ~56,000 crore, which has been sanctioned. We may not require ~8,000-9,000 crore. We were more generous and liberal in our initial estimate.

In many old cases, exporters may not have claimed incentives that we earlier included. Many exporters who applied may also not be eligible,” said a senior government official.

While the allocation was made in FY22, so far around ~33,000 crore has been disbursed. The rest of the claims are expected to be settled in the current fiscal year, the official added.

This amount includes claims relating to Merchandise Exports from India Scheme (MEIS), Service Exports from India Scheme (SEIS), Rebate of State Levies (ROSL), Rebate of State and Central Taxes and Levies (ROSCTL) and other scripbased schemes relating to earlier policies.

This also includes support for Remission of Duties and Taxes on Exported Products (RODTEP) and ROSCTL for exports made in the March quarter of FY21.

The Centre has phased out most export-incentive schemes as they were noncompliant with World Trade Organisation (WTO) rules.

However, it has introduced RODTEP and ROSCTL to reimburse taxes and levies paid by exporters.

MEIS has the largest claim of ~33,010 crore, followed by SEIS (~10,002 crore), ROSCTL (~5,286 crore), RODTEP (~2,568 crore), ROSL (~330 crore) and other legacy schemes like Target Plus (~4,831 crore).

These amounts were over and above the duty remission amount of ~12,454 crore for the RODTEP scheme and ~6,946 crore for the ROSCTL scheme already announced for exporters for FY22.

For merchandise exports, all sectors covered under MEIS, such as pharmaceuticals, iron and steel, engineering, chemicals, fisheries, agriculture and allied sectors, auto and auto components would be able to claim benefits for exports made in the earlier years.

Benefits would help such sectors maintain cash flows and meet export demand in the international market.

India’s exports have seen robust growth in recent months. For the first time, merchandise exports crossed the $400-billion mark in FY22.

In April, exports grew 24.2 per cent year-on-year to their third-highest level of $38.2 billion, on the back of higher commodity prices. This was amid the ongoing Russiaukraine war, the preliminary trade data released by the commerce ministry last week showed.

The preceding month had witnessed record outbound shipments of $42.2 billion.