Drawback and MEIS available in case of Merchanting Trade?

[Guest]

Is Drawback and MEIS available in case of Merchanting Trade?

Can anyone clarify or provide all the aspects or FAQs of merchanting trade.

Eg. 1. How to make payments?

2. How to clear the BRC of the same as Shipping Bill not available?

[JSW CEMENTLIMITED]

In my opinion, Drawback or MEIS is not available in case of Merchanting Trade as the exports are not originating from India and further No shipping bills are available.

Regards,

V.Venkat Raman

[Guest]

But we are receiving funds in India in foreign currency.

[JSW CEMENTLIMITED]

Export promotion schemes have been formulated to increase the presence of Indian goods in foreign market as well as and thereby earning foreign currency and accordingly the requirement of documents to be submitted has been devised. In case of merchanting transaction, you are earning foreign currency for the brokerage type of service that too for selling products of other country to some other country. In this case since there is no involvement of Indian manufactured goods and further you cannot fulfil the documentary requirements, I feel No drawback or other benefits under export promotion scheme would be available for merchanting transaction.

V. Venkat Raman

[Ankur Jain]

I completely agree that MEIS benefits are NOT available to Merchanting Trade Transactions! Please refer to Para 3.03 of the FTP 2015-20 that provides for 'Objective' of the MEIS. As per the said Para, the Objective of MEIS is to offset infrastructural inefficiencies and associated costs involved in export of goods/ products, which are produced/ manufactured in India, especially those having high export intensity, employment potential and thereby enhancing India's export competitiveness.

AI Summary

Export incentive eligibility: merchanting trade excluded as exports don't originate in India and lack shipping bills. Drawback and MEIS are not available for merchanting trade because such transactions do not involve exports of goods originating in India and generally lack shipping bills and required documentary proof; export incentives are limited to goods produced or manufactured in India and require evidence of export origin and shipping formalities.