Drawback and MEIS available in case of Merchanting Trade?, Customs - Exim - SEZ

[Rahul Agrawal]

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?

Posts / Replies

[JSW CEMENT LIMITED]

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

[Rahul Agrawal]

But we are receiving funds in India in foreign currency.

[JSW CEMENT LIMITED]

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.