The Directorate General of Foreign Trade ( DGFT ) has recently announced amendments to the Interest Equalisation Scheme ( IES ), extending its validity until September 30, 2024, vide Trade Notice No. 17/2024-25 dated 17th September 2024.
These amendments, as outlined in Trade Notice No. 16/2024-25 dated August 31, 2024, are intended to rationalise the scheme while continuing to offer financial support to exporters, particularly those in the Micro, Small, and Medium Enterprises ( MSME ) sector.
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The changes take effect immediately and will impact exporters across various sectors, from small enterprises to larger manufacturers.
One of the major changes is the introduction of an annual cap on the net subvention amount available under the IES. The cap is set at Rs 10 crore per Importer Exporter Code ( IEC ) for the financial year beginning April 1, 2024, and will remain in place until September 30, 2024. This ceiling applies uniformly across industries, meaning businesses will need to account for this limit when planning their export strategies and financial resources.
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For MSME manufacturers, the government has imposed a further subvention cap of Rs 5 crore per IEC for the same financial year, ending on September 30, 2024.
Additionally, a cap of Rs 2.5 crore per IEC has been introduced for manufacturer and merchant exporters, effective until June 30, 2024. This measure is intended to extend financial support to exporters while ensuring a balanced approach to the allocation of subvention benefits.
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