In this article we would discuss SEIS, Services Exports from India Scheme which is introduced as per Foreign Trade Policy of India 2015-2020 from 1st of April 2015 to 31st of March, 2020. SEIS, Services Exports from India Scheme which is under the Foreign Trade Policy of India 2015-20 is a modification of SEIS, which is served from India Scheme under Foreign Trade Policy 2009-14.
The SEIS Scheme shall thus come into force with effect from the date of notification of this Policy, i.e. the rewards under the SEIS shall be admissible for the exports made/services which are rendered on or after the date of notification of this Policy.
SEIS scheme is thus introduced under the Foreign Trade Policy 2015-20 in order to encourage export of the notified Services from India. Thus instead of the Indian Service providers, the term SEIS reads as the SERVICE PROVIDERS WHICH ARE LOCATED IN INDIA.
The rate of the SEIS scheme under the Foreign Trade Policy 2015-20 is thus based on the net foreign exchange which is earned on services. The reward which is issued as duty credit scrip, would thus no longer be with actual user condition and will no longer be restricted to the usage for specified types of goods but they would be freely transferable and also usable for all the types of goods and services tax 3 debits on the procurement of services/goods. Debits would thus be eligible for CENVAT credit or drawback.
What is Duty Credit Scrip?
It is rewarded at notified rates on the earning of net foreign exchange. This can thus be used for the payment of customs duties, service tax on the procurement of services, exchange duties, in the case of default in fulfilment of the export obligation.
Duty credit scrip is thus valid for 18 months from the date of its issue.
Eligible under this scheme
In order to be eligible for duty scrip credit under this scheme, the service provider (company/LLP/ Partnership) needs to have a minimum net free foreign exchange earning of USD 15000 in the preceding financial year.
Service providers (individual or proprietorship) needs to have minimum net free foreign exchange earnings of USD 10000 in the preceding financial year.
Most importantly, the service provider needs to have an Importer Exporter Code to claim the reward.
Professional services like legal services, taxation services, auditing, engineering services, dental services, services which are provided by nurses.
Research and development services on –
- natural science,
- social science and humanities and
- inter-disciplinary services.
Rental/leasing services without operators– like ships, aircraft, transport equipment and other machinery and equipment.
There are many other services that are eligible for SEIS. One can refer Annexure to Appendix 3D on official website dgft.gov.in/
Ineligible under this scheme
Other sources of foreign exchange earning like donations, equity or debt participation, receipts of payment of loans etc., unrelated to the rendering of services are ineligible for duty credit scrip.
How to calculate net foreign exchange?
Gross earnings of foreign exchange – total expenses or payment or remittances of foreign exchange = Net Foreign Exchange.
Furthermore, to increase exports in Special Economic Zones, the government has extended the scope of this scheme to these zones also. This scheme is introduced to encourage export of notified services from India under Foreign Trade Policy 2015-20.
Related Article- Market Development Assistance (MDA) Scheme