The federal government on Tuesday notified that advantages to every exporter underneath the Merchandise Exports Incentive Scheme (MEIS) for the September-December interval is capped at Rs 2 crores. For the cell phone business which exported units near Rs 7571 crore by worth within the corresponding interval final 12 months, based on knowledge from the Ministry of Commerce, a 2% MEIS profit meant an incentive of Rs 150 crore.
In 2019, Korean main Samsung alone accounted for 82% of the machine and component exports, whereas excessive worth iPhone maker Apple made up 15%.
“The cap of Rs 2 crores per exporter definitely impacts giant exporters who’re most crucial to seize world markets,” Pankaj Mohindroo, chairman, India Mobile and Electronics Affiliation (ICEA) informed ET. “In our business, it impacts the part exporters essentially the most.”
Samsung and Apple did not reply to ET’s emailed queries.
ICEA represents main cellular producers together with Xiaomi, Vivo, Oppo, Apple, contract producer Foxconn in addition to home-bred manufacturers Lava, Micromax and Karbonn.
“MEIS was dedicated upto 31/12/2020 with none cap although it was decreased from 4% to 2%. The sudden denial from September 2020 is just not applicable since it’s a sovereign dedication,” Mohindroo stated.
He added that the physique will ship a written communication to the federal government relating to the identical.
Below MEIS, the federal government supplies responsibility advantages relying on the product and nation. Rewards underneath the scheme are payable as a share of realised free-on-board worth (of two%, 3% and 5%) and MEIS responsibility credit score scrip will be transferred or used for fee of a variety of duties together with the fundamental customs responsibility.
The MEIS price for cell phones was decreased from 4% to 2% from April.
“…on the entire, this may hinder PM’s dream of creating India an export hub,” stated Bibhash Deb, Head-Taxation, Authorized & Secretarial at Lava Worldwide.
One other business govt sought to know that if there is no such thing as a profit, why would a producer import elements from China, assemble them in India after which export, when the identical will be achieved straight from China at a decrease price.
“…first you appeal to corporations to closely put money into setting-up manufacturing in India by giving such incentives after which place a cap over it,” the manager stated.
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