| SI No | Registrations / Licenses | Compliance |
|---|---|---|
| 1 | Product Title | Interest Equalization Scheme (IES) |
| 2 | Legal framework | RBI Circular No. DOR.STR.REC.93/04.02.001/2021-22 dated March 8, 2022 DGFT Trade Notice 38/2021-22 dated March 15, 2022 |
| 3 | Regulatory Body | Monitored by : DGFT (Directorate General of Foreign Trade) Regulated by : RBI (Reserve Bank of India) |
| 4 | Insight / Objective | – To promote Exports from India – To provide pre and post-shipment export credit to exporters in rupees |
| 5 | Categories/Types | Different interest equalization rates applicable to Manufacturers and Merchant Exporters |
| 6 | Benefits/Obligation | For MSME – MSME manufacturer exporters exporting under any HS lines : 3% – MSME merchant exporters exporting under any HS lines : 2% For Others – Manufacturer exporters and merchant exporters exporting under 410 HS lines : 2% (after excluding 6 HS lines pertaining to Telecom Sector as mentioned above) |
| 7 | Eligibility | All Manufacturer exporters and merchant exporters exporting under 410 HS lines and MSME manufacturer exporters Excluding 1.Telecom Instruments sector having six HS lines1 shall be out of the purview of the Scheme, except for MSME manufacturer exporters. 2.The Scheme will not be available to those beneficiaries who are availing the benefit under any Production Linked Incentive (PLI) scheme |
| 8 | Validity | Scheme Validity : Upton 31-03-2024 or till further review, whichever is earlier IES Number Validity : Valid for 1 Year and to be reapplied every year |
| 9 | Forms/Due Dates | To be applied through Form IES yearly through DGFT Portal. After successful application an Unique IES number is generated and the same has to be informed to the Bank for further process |
| 10 | Amendments | Once filed no amendments is allowed |
| 11 | Government Fee | Rs. 200 Per application |
| 12 | Penalty for Non Compliance | There is no penalty but the exporter cannot claim this scheme benefit unless IES number is generated |
| 13 | Guidelines / Other Provisions | All eligible exports under the scheme would have to meet the criteria of minimum processing for the goods to be called as Originating from India and would be governed by provision of Paragraph 2.108 (a) (Rules of Origin [Non preferential]) of Handbook of Procedures of Foreign Trade Policy 2015-2020 The goods must be manufactured by the exporter as per the definition of ‘manufacture’ of the FTP. In the case of the use of imported inputs, the export products will be classified as originating in India only if they undergo significant processing or operation (described in detail in the Handbook of Procedures). |
| 14 | Checklist/Questionnaire | – IT-HS Codes Export Products – Export Order Value – Total Loan Amount |
| 15 | Venn Timelines | 24 – 48 Hours from the complete documentation |
| 16 | Any Other Information | Originating from India and would be governed by provision of Paragraph 2.108 (a) Rules of Origin (Non-Preferential) (a) Rules of Origin (Non-Preferential) criteria are as under: (I) Goods are to be manufactured by the exporting entity as per the definition of “Manufacture” in Paragraph 9.31 of FTP; and (II) If imported inputs (Duty Paid or Duty Free) have been used for the production of export product, the export product can be considered to be originating in India (Non Preferential) only if the imported inputs undergo the processing/ operations that exceed the following: 1.Simple operations consisting of removal of dust, sifting or screening, sorting, classifying, matching (including the making-up of sets of articles), washing, painting, cutting; 2.Changes of packing and breaking up and assembly of consignments; 3.Simple cutting, slicing and repacking or placing in bottles, flasks, bags, boxes, fixing on cards or boards, and all other simple packing operations; 4.Operations to ensure the preservation of products in good condition during transport and storage (such as drying, freezing, keeping in brine, ventilation, spreading out, chilling, placing in salt, Sulphur dioxide or other aqueous solutions, removal of damaged parts, and like operations); 5.Affixing of marks, labels or other like distinguishing signs on products or their packaging; 6.Simple mixing of products; 7.Simple assembly of parts of products to constitute a complete product; 8.Disassembly; 9.Slaughter which means the mere killing of animals; and 10.Mere dilution with water or another substance that does not materially alter the characteristics of the products. |
