Axis Securities: Impact Of Change In MEIS Scheme On Bajaj Auto

"BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Axis Securities Report.The government on September 01, 2020 capped the benefits under the Merchandise Export from India Scheme (MEIS) at Rs 2 crore per exporter on exports made between September 01 to December 31, 2020 without changing the coverage of the scheme and the applicable rates.Also, any Import Export Code (IEC) holder who has not made any exports for a period of one year preceding September 01, 2020 or any new IECs obtained on or after the date of publication of the said notification would not be eligible for submitting any claim under this scheme, and the ceiling would be subject to a downward revision to ensure that the total claim does not exceed the allocated Rs 5,000 crores for the period.Under MEIS, the government provides duty benefits depending on product and country. Rewards under the scheme are payable as percentage of realized free-on-board value (of 2%, 3% and 5%) and MEIS duty credit scrip can be transferred or used for payment of a number of duties including the basic customs duty.In addition, it has been notified by the Director General of Foreign Trade (DGFT) that MEIS scheme is withdrawn with effect from January 01, 2021.Bajaj Auto derives approximately 40-42% of its net sales from exports.The Company enjoys around 2% of exports incentives under the MEIS scheme which translates roughly to approximately Rs 240 crore annually as we have estimated Company’s total exports at approximately Rs 12 thousand crore.In our opinion, the changes in the scheme would result in a direct loss of approximately Rs 80 crore to the Company for the period September to December 2020 (approximately Rs 20 crore per month)..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

Axis Securities: Impact Of Change In MEIS Scheme On Bajaj Auto

The changes in the MEIS scheme would cause a direct loss of Rs 80 crore to Bajaj Auto between September and December 2020.

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP

Axis Securities: Impact Of Change In MEIS Scheme On Bajaj Auto

The changes in the MEIS scheme would cause a direct loss of Rs 80 crore to Bajaj Auto between September and December 2020.

Choose a plan

Follow Us

DOWNLOAD THE APP