Accounting for MEIS Script

MEIS was introduced in the Foreign Trade Policy (FTP) for the period 2015-2020. The MEIS was launched as an incentive scheme for the export of goods. The rewards are given by way of duty credit scrips to exporters. The MEIS is notified by the DGFT (Directorate General of Foreign Trade) and implemented by the Ministry of Commerce and Industry. 

MEIS scrips are freely transferable and are usable for payment of Customs Duty (BCD), Anti-Dumping Duty (ADDs) and Safeguard Duties. The duty credit scrips cannot be used for payment of IGST (Integrated Goods and Services Tax) and GST compensation cess in imports, and CGST, SGST, IGST and GST compensation cess for domestic procurement.

Accounting Entry

• At the time of credit received

Dr  MEIS Credit Scrip Credits (ledger shall be under Current Assets)
Cr  MEIS Credit Scrip Received (ledger shall be under Indirect Income)

• At the time of adjustment to Customs Duty

Dr  Customs Duty (liability payable)
Cr  MEIS Credit Scrip Credits

• At the time of sale of MESI Credit Script

Dr  Bank a/c
Cr  MEIS Credit Scrip Credits

Different opinion of accounting view shall be taken based on method of accounting, which applies for an entity for the relevant financial year.