The Directorate General of Foreign Trade (DGFT) said that benefits under the Merchandise Exports from India Scheme, Service Export from India Scheme, Rebate of State and Central Taxes and Levies, and Rebate of State Levies have been “put on hold for a temporary period”.
“During this period, no fresh applications would be allowed to be submitted at the online IT module of DGFT for these schemes and all submitted applications pending for issuance of scrips would also be on hold,” the DGFT said in a trade notice.
It said that trade would be informed once issuance is opened once again.
“This suspension will create uncertainty with respect to these benefits for the exporters and may also impact thier cash flows. The export industry would hope that this suspension is lifted soon and the benefits are made available in full and soon,” said Abhishek Jain, Tax Partner, EY.
The suspension comes amid the government yet to notify the benefits rates under the Remission of Duties and Taxes on Export Products (RoDTEP) scheme that was put in place in January.
Export bodies have been asking for release of the funds for MEIS, clarity on SEIS benefits and continuance of seamless refund of IGST to ease fund blockage.
Merchandise exports grew a record $95 billion during April-June and India aims to clock $400 billion exports in FY22.