The five year Foreign Trade Policy (FTP) 2015-2020 introduced the ‘Service Exports from India Scheme (SEIS)’. This reward scheme came into force from the date of notification i.e. 1.04.2015.

The SEIS is to encourage export of notified services from India. The motto of the scheme is to provide rewards to exporters to offset infrastructural inefficiencies and associated costs involved and to provide exporters a level playing field. Also in order to give boost to exports from SEZ, the FTP has extended the reward scheme to units located in SEZs.

Served from India Scheme (SFIS) is replaced by Service Exports from India Scheme (SEIS) .The intention is to provide benefits to all service providers located in India, instead of Indian Service Providers. Earlier, under SFIS the benefit was not available for foreign brand of the Indian companies.

Incentives: – Duty Credit Scrips shall be granted as rewards under Service Export from India Scheme (SEIS). The Duty Credit Scrips and goods imported/ domestically procured against them shall be freely transferable. The Duty Credit Scrips can be used for the following requirement.

• Payment of Custom Duties for import of inputs of goods, except items listed in Appendix 3A
• Payment of excise duties on domestic procurement in 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 this policy
• Payment of composition fee under FTP, for payment of application fee under FTP

Entitlement under SEIS: – Service Provider of eligible services shall be entitled to Duty Credit Scrips at notified rates as per appendix 3D (attached here). The rate of reward under SEIS would be based on Net Foreign Exchange.

Eligibility:

• Service Provider who is providing ‘service’ from India to any other country.
• Service provider who is providing ‘service’ from India to consumer of any other country
• Service provider should have minimum net foreign exchange earning of US$ 15,000 in preceding financial year.
• For individual service providers/sole proprietorship, such minimum net free foreign exchange earnings criteria would be US$ 10,000 in the preceding financial year
• Payment in Indian Rupees for service charge earned on specified services, shall be treated as receipt in deemed foreign exchange as per guidelines of Reserve Bank of India. The list of such services in indicated in Appendix 3E.
• One must hold active IEC at the time of rendering services for which rewards are claimed
• Foreign Exchange earned for rendering of services other than the notified service will not be counted for entitlement.
• Free foreign exchange earned through International Credit Cards and other instruments, as permitted by RBI shall also be considered for computation of value exports
• If the IEC holder is a manufacturer of goods as well as service provider, foreign exchange earnings and total expanses/payment/remittances shall be taken into account for service sector only.

Ineligible categories

Foreign exchange remittances other than those earned for rendering of notified services and following shall not be taken in to account for calculation of entitlement:

• Foreign Exchange remittances:
• Related to Financial Service Sector
• Raising of all types of foreign currency loans
• Export proceeds realization of clients
• Issuance of Foreign Equity through ADRs / GDRs
• Issuance of foreign currency bonds
• Sale of securities and other financial instruments
• Other receivables not connected with services rendered by financial institutions
• Earned through contract/regular employment abroad
• Payments for services received from EEFC account
• Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc.
• Foreign exchange turnover by Educational Institutions like equity participation, donations etc.
• Export turnover relating to services of units operating under SEZ/EOU/EHTP/STP/BTP Schemes or supplies of services made to such units.
• Clubbing of turnover of services rendered by SEZ/EOU/EHTP/STP/BTP units with turnover of DTA service providers
• Export of Good
• Foreign exchange earnings for services provided by Airlines, Shipping lines for routes not touching India at all.
• Service providers to Telecom Sector.

Remittances through Credit Card and other instruments for SEIS: – Free Foreign exchange earned through international credit cards and other instruments, as per permitted by RBI shall also be taken into account for computation of value of exports