Govt proposes WTO-compliant schemes to boost Make in India

The commerce ministry under outgoing trade minister Suresh Prabhu has come up with a World Trade Organization -compliant export promotion scheme along with a production based support scheme to boost Make In India as part of its 100-day action plan ahead of prime minister-designate Narendra Modi’s swearing in ceremony on Thursday. The new export promotion scheme may replace the existing Merchandise Export from India Scheme as the US has challenged India’s existing export subsidy schemes at the WTO on the grounds of its incompatibility with multilateral rules. The major un-rebated levies are state value added tax/ central excise duty on fuel used in transportation, captive power and farm sector, mandi tax, duty on electricity, stamp duty on export documents, purchases from unregistered dealers, embedded central goods and services tax and compensation cess, coal used in production of electricity. Under the special and differential provisions of the WTO’s Agreement on subsidies and countervailing measures, so-called least-developed countries and developing countries whose gross national income per capita is below $1,000 a year at the 1990 exchange rate are allowed to provide export incentives to any sector that has a share below 3.25% in global exports.