Excellent opportunity has been provided for the Service exporters to derive benefit under SERVICE EXPORT FROM INDIA SCHEME (SEIS). The said duty credit script is fully transferable.

Exporters are eligible to get the benefit of the said scheme for AM-16 period on the basis of exports during 01/04/2015 to 31/03/2016.

Objective

The government has introduced an excellent scheme for boosting the export of services. The said scheme is for various service industries professional, educational, Travel agents, Hotels & Restaurants, Airlines etc. who are earning foreign exchange by way of rendering various types of services. We give below the main categories of services under the said scheme (Illustrate only).

• Professional Services
• Research & Development Services
• Audio Visual Services
• Construction and related to Engg. Services
• Educational Services
• Environment Services
• Health related Services
• Travel related Services
• Sporting Services
• Transport Services
• & Various other specified services

Eligibility

Such service provider should have minimum NET free foreign exchange earnings of US$15,000 in preceding financial year to be eligible for Duty Credit Scrip. For Individual Service Providers and sole proprietorship, such minimum NET free foreign exchange earnings criteria would be US$10,000 in preceding financial year.

Net Foreign exchange earnings for the scheme are defined as under:

Net Foreign Exchange = Gross Earnings of Foreign Exchange minus Total expenses / payment / remittances of Foreign Exchange by the IEC holder, relating to service sector in the Financial year.

If the IEC holder is a manufacturer of goods as well as service provider, then the foreign exchange earnings and Total expenses / payment / remittances shall be taken into account for service sector only.

Free Foreign Exchange earned through international credit cards and other instruments, as permitted by RBI shall also be taken into account of computation of value of exports.

Service Provider means persons providing :

• Supply of a 'Service' from India to any other country
• Supply of a 'Service' from India to service consumer of any other country in India

Entitlement

All eligible Service providers shall be entitled for duty credit scrip ranging from 3% to 5% of Foreign Exchange earned.

Utilisation of Scrip

• Payment of Customs Duties for Import of inputs or goods, except items listed in Appendix 3A
• Payment of excise duties on domestic procurement of inputs or goods, including capital goods as per DoR notification
• Payment of service tax on procurement of services as per DoR notification
• Payment of Customs Duty and fee as per paragraph 3.18 of the policy
• Script issued under this scheme must be valid on the date on which actual debit of duty is made

Following categories are not covered under SEIS

• Foreign exchange remittances other than those earned for rendering of notified services would not be counted for entitlement. Thus, other sources of foreign exchange earnings such as equity or debt participation, donations, receipts of repayment of loans etc. and any other inflow of foreign exchange, unrelated to rendering of service, would be ineligible.
• Following shall not be taken into account for calculation of entitlement under the scheme
  1. Foreign Exchange remittances
     1. Related to Financial Services Sector
        1. Raising of all types of foreign currency Loans
        2. Export proceeds realization of clients
        3. Issuance of Foreign Equity through ADRs / GDRs or other similar instruments
        4. Issuance of foreign currency Bonds
        5. Sale of securities and other financial instruments
        6. Other receivables not connected with services rendered by financial institutions
     2. Earned through contract/regular employment abroad (e.g. labour remittances)
  2. Payments for services received from EEFC Account
  3. Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc.
  4. Foreign exchange turnover by Educational Institutions like equity participation, donations etc.
  5. Export turnover relating to services of units operating under EOU / EHTP / STPI / BTP Schemes or supplies of services made to such units
  6. Clubbing of turnover of services rendered by SEZ / EOU /EHTP / STPI / BTP units with turnover of DTA Service Providers
  7. Exports of Goods
  8. Foreign Exchange earnings for services provided by Airlines, Shipping lines service providers plying from any foreign country X to any foreign country Y routes not touching India at all
  9. Service providers in Telecom Sector