In a relief to service exporters, the Centre last week notified the benefits to be given for exports undertaken in 2019-20. The sector has long been waiting for these rates to be notified and now it can be expected that the move will ease the credit burden of the sector. The pandemic has wreaked havoc on the service sector, with industries like travel, tourism and hospitality bearing the brunt of it, and last week’s Commerce Ministry notification, though a bit late, is welcome.

There are some concerns, according to some. First, a limit on total entitlement under the scheme has been imposed for service exports rendered in the period 01.04.2019 to 31.03.2020 and capped at Rs. 5 Cr. For some experts, this value cap is against interest of the sector. An exporters’ association has even added that it would take up the issue with the Government soon. Some others point out to the deadline for filing the online application (31.12.2021).

The move is overall welcome, however. It is noteworthy here that early this month, the Centre announced that it will clear all arrears under various export-incentive schemes -- including MEIS, SEIS, Rebate of State Levies, Rebate of State and Central Taxes and Levies-- to help exporters address their liquidity concerns. This move, expected to benefit 45,000 exporters, was hailed by exporters, and now the SEIS notification is good news again.

Meanwhile, the Commerce Minister last week took part in an interaction with exporters and bankers on export financing issues. He urged banks to take a more liberal approach, with regard to credit rating, penal interest and penal insurance charge, and also advised the officials of his Ministry to find solution to all problems raised by the export community. Steps like this are welcome. The government should keep a close eye on the challenges being faced by our exporters.