India’s Ministry of Finance which is currently working on a scheme to replace the Merchandise Export from India Scheme (MIES), is likely to limit export incentives to just three sectors, namely, iron and steel, automobiles and readymade garments, a government source said on Wednesday, November 11.
The official said that, with MIES coming to an end effective from January 1, 2021, a new scheme to replace it - Remission of Duties or Taxes on Export Products (RDTEP) - will cover only these three sectors as the government did not have sufficient funds available to extend fiscal reimbursements or incentives to a greater number of exporting industries.
A committee to finalize the fine-print of RDTEP is expected to submit its final report by the end of the current month, he said.
Initially, the committee will fix the rates at which taxes will be reimbursed for exports of iron and steel, automobiles and readymade garments. Subsequently, the list may be expanded subject to improvements in the fiscal position of the government, the official said.
The government official, however, ruled out any possibility of an extension of MIES beyond January 1, 2021, for any other sectors, adding that the new scheme covering three exporting sectors will be in place on the first day of next year.