The Exports from India Scheme launched by DGFT under Chapter III of the Free Trade Policy 2015-20 lays down the Service Exports from India Scheme (SEIS). SEIS is one of the 2 schemes that are part of the Exports from India Scheme, the other being the MEIS.
Service Exports from India Scheme promotes export of services from India by providing duty scrip credit for eligible exports. SEIS is used by the government to encourage exports from India by incentivizing exports and using them for availing tax benefits.
Eligibility for Availing Service Exports from India Scheme
A service provider must meet the following conditions to be eligible for availing Service Exports from India Scheme (SEIS):
- The service provider must be dealing with notified services
- The service provider must be located in India.
- Services rendered in Cross Border Trade and Consumption abroad are eligible.
- A service provider registered a Company, LLP or Partnership Firm must have a minimum net free foreign exchange earnings of USD 15,000 in the previous financial year.
- A service provider who is a proprietorship or individual must have minimum net foreign exchange earnings of USD 10,000 in the previous financial year.
- The service provider must hold an active Import Export Code to claim the duty scrips.
Ineligible Categories under SEIS
Foreign exchange remittances other than those earned for rendering of notified services 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 are ineligible for claiming benefits under SEIS.
Duty Scrips under Service Exports from India Scheme
Duty scrips can be used to pay various duties and taxes imposed by the Government of India. The duty scrips under SEIS can be claimed in accordance with the notified rates on net foreign exchange earned. The rates under SEIS are fixed between 5% and 7%.
The duty scrips issued under the Service Exports from India Scheme remain valid for 24 months from the date on which they are issued.
Process to Apply for Duty Scrips under SEIS
The following procedure is followed to claim benefits under the Service Exports from India Scheme:
- An application for grant of duty credit scrip is filed for a financial year.
- A Digital Signature Certificate is required to file this application.
- The applicant can select the Jurisdictional Registering Authority on the basis of the corporate, registered, branch or head address mentioned on IEC.
- The Registered Authority process the application and decides whether the application is eligible for benefit under Service Exports from India Scheme or not.
ALSO READ: Merchandise Exports from India Scheme (MEIS)
Services and Rates of Reward under SEIS
- Professional Services- 7%
- Legal Services
- Accounting, auditing, and book-keeping services
- Taxation services
- Architectural services
- Engineering services
- Integrated engineering services
- Urban planning and landscape architectural services
- Medical and dental services
- Veterinary services
- Services provided by midwives, nurses, physiotherapists and paramedical personnel.
- Research and development services- 7%
- R&D services on natural sciences
- R&D services on social sciences and humanities
- Interdisciplinary services
- Rental/Leasing services without operators- 7%
- Relating to ships
- Relating to aircraft
- Relating to other transport equipment
- Relating to other machinery and equipment
- Audiovisual services- 7%
- Motion picture and video tape production and distribution service
- Motion picture projection service
- Radio and television services
- Radio and television transmission services
- Sound recording
- Construction and Related Engineering Services- 7%
- General construction work for building
- General construction work for civil engineering
- Installation and assembly work
- Building completion and finishing work
- Educational Services- 7% Rate of Reward
- Primary education services
- Secondary education services
- Higher education services
- Adult education
- Environmental Services- 7%
- Sewage services
- Refuse disposal services
- Sanitation and similar services
- Health and Social Services- 5%
- Hospital services
- Tourism and Travel Services- 5% or 7%
- Hotel (5%)
- Restaurants (including catering) (5%)
- Travel agencies and tour operators services (7%)
- Tourist guides services (7%)
- Recreational, Cultural and Sporting Services- 7%
- Entertainment services (including theatre, live bands and circus services)
- News agency services
- Libraries, archives, museums and other cultural services
- Sporting and other recreational services
- Transport & Auxiliary Services- 7%
- Passenger transportation
- Freight transportation
- Rental of vessels with crew
- Maintenance and repair of vessels
- Pushing and towing services
- Supporting services for maritime transport
- Rental of aircraft with crew
- Maintenance and repair of aircraft
- Airport Operations and ground handling
- Passenger Transportation
- Freight transportation
- Rental of commercial vehicles with operator
- Maintenance and repair of road transport equipment
- Supporting services for road transport services
- Cargo-handling services
- Storage and warehouse services
- Freight transport agency services
- Other Business Services- 5%
- Advertising services
- Market research and public opinion polling services
- Management consulting service
- Services related to management consulting
- Technical testing and analysis services
- Services incidental to agricultural, hunting and forestry
- Services incidental to fishing
- Services incidental to mining
- Services incidental to manufacturing
- Services incidental to energy distribution
- Placement and supply services of personnel
- Investigation and security
- Related scientific and technical consulting services
- Maintenance and repair of equipment (not including maritime vessels, aircraft or other transport equipment)
- Building- cleaning services
- Photographic services
- Packaging services
- Printing, publishing
- Convention services
The following must not be taken into account to calculate the entitlement under Service Exports from India Scheme:
- Foreign Exchange remittances:
- Related to the Financial Services Sector
- Raising of all types of foreign currency Loans.
- Export proceeds realization of clients.
- Issuance of Foreign Equity through ADRs/GDRs or other similar instruments.
- 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 (e.g. labour remittances).
- Related to the Financial Services Sector
- 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 EOU/EHTP/STPI/BTP Schemes or supplies of services made to such units.
- Clubbing of turnover of services rendered by EOU/EHTP/ STPI/BTP units with turnover of DTA Service Providers.
- 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.
- Service providers in the Telecom Sector.
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