The Merchandise Exports from India Scheme (MEIS) was introduced to benefit exporters. The intention was to offset infrastructural inefficiencies and associated costs, thereby making India’s products more competitive in the global market. Benefits available under MEIS are in the form of transferrable duty credit scrips which the exporter can use for payment of customs duties applicable on imports. Given such significant benefits, MEIS has proved to be crucial in reducing the overall cost involved in exports and has especially been popular among the country’s small and medium sector which accounts for almost half of the country’s exports.

However, the US and the international community felt the MEIS was in direct violation of World Trade Organisation guidelines. But a complete withdrawal of the MEIS in response to international pressure would have placed an additional burden on the small and medium sector which is already struggling to counter the reduction in demand due to the global economic slowdown. Keeping this in mind, the Rebate of State and Central Taxes and Levies was introduced as an interim measure in March 2019. This rebates all embedded state and central taxes for garments and apparel and is presently available for the textile industry. It offers transferable duty credit scrips to exporters in order to offset levies.