We apprised you regarding Notification No. 30/2015-2020 dated September 1, 2020 which restricted MEIS benefit for exporters to Rs.2 crore per Import-Export Code (‘IEC’) for exports made between September to December 2020. We also highlighted that the amendment is amenable to challenge before Constitutional Courts.

Recently, this amendment was challenged before the Gujarat High Court in the case of Man Industries (India) Limited v. UOI, SCA No. 15716 of 2020. The challenge was on the grounds that reduction of MEIS benefit is against legitimate expectation of exporter community, in breach of Doctrine of Promissory Estoppel and violative of Article 14 of the Constitution of India. The High Court has accepted this challenge and issued Notice. The matter is likely to be listed for final hearing in January 2021.

NITYA Comments: This is a positive development and such challenge is taking place in other High Courts as well. The exporter community will closely follow this development and expect Courts to restore full MEIS benefit.

 Further, introduction of Remission of Duties and Taxes on Exported Products Scheme is likely to be delayed and MEIS is expected to be extended till March 31, 2021. The Government may impose similar restriction in future as well. If such restriction is imposed, it will further increase stakes for exporter community and may be amenable to challenge before the Constitutional Courts.

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