The foreign Trade Policy of India 2015-20 introduced SEIS (Service Exports from India Scheme) for service exporters by modifying SFIS scheme of previous years by benefiting all service providers of India including foreign brand of Indian Companies.
Objective of Service Exports from India Scheme (SEIS) is to encourage and maximize export of notified Services from India and to provide rewards to exporters to offset infrastructural inefficiencies and associated costs.
Nature of Rewards
Duty Credit Scrips shall be granted as rewards under SEIS. The Duty Credit Scrips and goods imported / domestically procured against them shall be freely transferable. The Duty Credit Scrips can be used for :
- Payment of Basic Customs Duty and Additional Customs Duty specified under sections 3 (1), 3 (3) and 3 (5) of the Customs Tariff Act, 1975 for import of inputs or goods, including capital goods, as per DoR Notification, except items listed in Appendix 3A.
- Payment of Central excise duties on domestic procurement of inputs or goods,
- (iv) Payment of Basic Customs Duty and Additional Customs Duty specified under Sections 3 (1), 3 (3) and 3 (5) of the Customs Tariff Act, 1975 and fee as per paragraph 3.18 of this Policy.
(a) Service Providers of notified services, located in India, shall be rewarded under SEIS. Only Services rendered in the manner as per Para 9.51(i) and Para 9.51(ii) of this policy shall be eligible. The notified services and rates of rewards are listed in Appendix 3D.
(b) Such service provider should have minimum net free foreign exchange earnings of US$15,000 in year of rendering service 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 year of rendering service. ii
(c) Payment in Indian Rupees for service charges 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 is indicated in Appendix 3E.
(d) 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.
(e) 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.
(f) In order to claim reward under the scheme, Service provider shall have to have an active IEC at the time of rendering such services for which rewards are claimed.
Ineligible categories 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.
- Service providers of notified Services, as per appendix 3D, are only eligible for Service Export from India Scheme.
For Example – Software Services Exporters are not qualified for SEIS.
- To claim SEIS Benefit, The Service Exporter should have an Active IEC Code.
For Example – Company XYZ has taken its Importer Exporter Code (IEC Code) on 01.04.2016, then all the Services provided by the Company after 01.04.2016 (i.e., Invoices generated after 01.04.2016) will be eligible for claiming rewards under SEIS.
- Eligible Service Exporter (can be a Company, LLP, or Partnership) should have minimum net free foreign exchange earnings of 15,000 USD in the year of rendering services to apply for SEIS Scheme.
- Similarly, Individuals and Sole Proprietors should have minimum net free foreign exchange earnings of 10,000 USD to be eligible to apply under the Service Export from India Scheme.
Note: The Foreign Trade Policy 2015-2020 clearly defines the Net Foreign Exchange Earnings, which is:
Net Foreign Exchange Earnings = Gross Foreign Exchange Earnings – Total Foreign Exchange Payments/ Remittances/ Expenses bore by the Service provider in the financial year.
- SEZ Units are also eligible for SEIS Scheme. But, EOU, STP, BHTP, EHTP Units are not eligible to claim SEIS incentives.
- Some eligible services are allowed to accept Indian rupees towards their service charges instead of foreign currency, which shall be deemed foreign exchange. A list of such services is given in (Appendix 3E)
- Free Foreign Exchange earned through international credit cards and other instruments, as permitted by RBI, shall also be taken into account for computation of the value of exports.
Entitlement under SEIS Service
Providers of eligible services shall be entitled to Duty Credit Scrip at notified rates (as given in Appendix 3D) on net foreign exchange earned.
Under SEIS Scheme, Exporters of selected Services are entitled to a 3% / 5% / 7% incentive on the Net Foreign exchange earned in the form of Duty Credit Scrips.
This SEIS scrip can be used to pay Import duty or can be encashed by selling it to any Importer. Therefore, it is best cash Incentive Scheme
List of documents required for the SEIS Scheme
- Importer Exporter Code (IEC Code)
- Application form ANF-3B (Aayat Niryat Form)
- CA Certificate
- Statement showing the nexus between Invoices and FIRC’s (Table No 4)
- Write up of Services
- Self–Certified copy of invoice and FIRC’s
- DGFT Digital Signature Certificate (DSC)
- RCMC Copy
- Necessary Declarations
- After selecting an option, you have to fill the details and submit the form.
- If you are exporting more than one Service, you have to follow the classification as per the Appendix 3D and show the “Service Category Information” in the ANF 3B form.
How to claiming SEIS Scheme benefits from DGFT?
- We conduct meeting with our Clients to understand the nature of their services and to determine whether they will be eligible to claim or not.
- We help our clients for preparation of required documentation to claiming the benefits.
- After receipts of required documents from clients we prepare and submit online applications to concerned authority and Follow-up with the DGFT Department to obtain the License under the SEIS scheme.
- After Receipt of SEIS Script, We also provide services of MEIS Script Registration done at custom.
- We also help to selling SEIS Script with preparation of necessary documentation procedure for the transfer of duty script to the buyer.
- Online transfer of SEIS Script details to the buyers on the DGFT website.
- SEIS Scheme Extension – There is no information/clarity from the Government till date regarding the extension of the SEIS Scheme
Notification No. 57 dated 31.03.2020 –
As per the Notification, the SEIS Scheme is continued for FY 2019-20 with revised rates. Rates will be notified in Appendix 3X. DGFT will take a decision on the continuity of the scheme for FY 2020-21 in due course.
- Public Notice No. 06/2015-20 dated 07.05.2019 –
As per the Public notice, Some Amendment has made in the Application form ANF 3B for claiming SEIS benefits under the FTP 2015-20