Temporary suspension of export incentive schemes to hurt pharma exporters

PSM News /

Mumbai, July 10, 2021:

 

The Union commerce ministry’s decision to put benefits under different export incentive schemes on hold for a temporary period is going to seriously affect pharmaceutical exporters.

 

Indian pharmaceuticals have 15 per cent share of the market globally. India’s pharmaceutical exports grew 18.7 per cent to US$ 24.44 billion in the financial year ended March 31, 2021 spurred by strong demand for the country’s generic drugs. It is one of the major foreign exchange earner industries in the country.

 

Exporters avail benefits under schemes like Merchandise Export from India Scheme (MEIS), Services Export from India Scheme (SEIS), Rebate of State Levies (RoSL), and Rebate of State and Central Taxes and Levies (ROSCTL). Depending on the nature of services and product, the government gives duty credit scrips or certificates to exporters. These scrips can be transferred or used for payment of a number of duties including the basic customs duty.

 

The Directorate General of Foreign Trade (DGFT) under the commerce ministry in a notification on July 8, 2021 stated that issuance of benefits/scrips under MEIS, SEIS, RoSL, and ROSCTL schemes would be on hold for a temporary period due to changes in the allocation procedure.

 

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. Exporters would be suitably informed, once issuance of scrips is opened again, said the notification.

 

MSME pharmaceutical exporters, who had been hit hard by several factors such as the lockdowns, huge increase in logistic and transactional costs, need this support to regain their advantages in the global markets, said Nipun Jain, chairman of Small and Medium Pharma Manufacturers Association (SMPMA).

 

“This suspension will create uncertainty regarding these export incentive schemes for the exporters and may also affect their cash flows. We hope that this suspension is lifted soon and the benefits are made available in full and soon,” said Jain. Pharmabiz