Government would expand the scope of the export credit insurance scheme by Export Credit Guarantee Corporation
Amid economic slowdown and drop in August exports by 6.05% to $26.13 billion, the finance minister Nirmala Sitharaman on Saturday announced a slew of sops to boost exports which include a new scheme — Remission of Duties or Taxes on Export Product (RoDTEP) to replace the Merchandise Exports from India Scheme (MEIS) and a fully automated refund route for input tax credits (ITC) in GST to be implemented by September end.
"The scheme for Remission of Duties or Taxes on Export Product (RoDTEP) will replace Merchandise Exports from India Scheme (MEIS). The existing dispensation in textiles of MEIS and the old ROSL will continue till December 31," she said, adding that sectors such as textiles that currently enjoy incentives of up to two per cent over MEIS "will transit into RODTEP from January 1, 2020".
She viewed that, "In effect, RODTEP will more than adequately incentivise exporters than all the existing schemes. The revenue forgone is projected at up to Rs 50,000 crore."
According to Sitharaman, the government would implement a fully automated electronic refund route for ITC in GST. "Fully electronic refund module (FORM GSAT RFD-01) for a quick and automated refund of ITC nearing completion..," she said.
Further, the government would expand the scope of the export credit insurance scheme by Export Credit Guarantee Corporation (ECGC). She said, "ECGC will expand the scope of ECIS. This will offer higher insurance cover to bank lending working capital for exports. While premium incidence for MSMEs will be moderated suitably. It is expected that the initiative will cost about Rs 17,000 crore per annum. This will enable a reduction in overall cost of export credit including interest rates."
Priority sector lending (PSL) norms for export credit have been examined and enabling guidelines under consideration of the RBI. This will release an additional Rs 36,000 crore to Rs 68,000 crore as export credit under the priority sector.
Confederation of Indian Industry director general Chandrajit Banerjee said the new scheme to compensate exporters for all duties will help considerably. ''Additional measures such as the provision of higher insurance cover, monitoring of export finance and turnaround times at ports and airports will go a long way in improving the competitiveness of Indian exporters,'' he noted.
Krishan Arora, Partner, Grant Thornton India LLP Partner Krishan Arora said the new remission based export incentive scheme for export of goods should provide a much-needed impetus to Indian exporters. "This coupled with real-time electronic processing of GST refunds should stimulate working capital for exporters which should help them further in their business requirements," he added.
Action Plan
|
Government would expand the scope of the export credit insurance scheme by Export Credit Guarantee Corporation
|
| This will offer higher insurance cover to bank lending working capital for exports |
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Nirmala Sitharaman and Anurag Thakur")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}