Government restores 2% additional duty benefit to mobile phone export

NEW DELHI: The government has restored 2 per cent additional duty incentive on mobile phones export with a view to boost shipments of the product, according to a notification of the commerce ministry.

The duty benefit under the Merchandise Export from India Scheme (MEIS) is effective from January 1 and will be applicable till March 31, 2020.

“A 2 per cent additional ad hoc incentive for mobile phones is notified for exports made with let export date from January 1 to March 31, 2020,” the Directorate General of Foreign Trade (DGFT) has said in a notification.

ET had reported on January 10 that the government may continue the additional 2 per cent duty incentive under MEIS after the issue was discussed at the Prime Minister’s Office. The additional 2 per cent benefits under MEIS were announced in August to help exporters who had claimed that delayed Goods and Services Tax (GST) refunds were hurting business.

The directorate on December 7 last year had reduced this export incentive from 4 per cent to 2 per cent for all exports except garments and made-ups on December 31.

As per estimates, mobile phone exports grew from Rs 1,300 crore in 2017-18 to over Rs 25,000 crore at present.

Under MEIS, the government provides duty benefits depending on product and country.

Rewards under the scheme are payable as percentage of realised free-on-board value and, MEIS duty credit scrip can be transferred or used for payment of a number of duties including the basic customs duty.

The commerce department is finalising the Remission of Duties or Taxes on Export Products (RoDTEP) scheme, which is compliant with multilateral trade rules and likely to replace MEIS in a few months. The MEIS scheme was found to violate the World Trade Organization rules as it was export focussed and India has appealed the organisation’s ruling on the subject. Till then, New Delhi can continue with the scheme.