Service Export Scheme from India (SEIS)
With an objective to encourage export of notified services from India, the Government announced the Service Exports from India Scheme (SEIS) with effect from 1 April, 2015, in accordance with the Foreign Trade Policy (FTP) 2015-2020.
It replaces Served from India scheme (SFIS) available under the Foreign Trade Policy 2009-2014.
The present rates of reward are 3 percent and 5 percent. The list of services and the rates of rewards were reviewed after 30 September, 2015.
Salient Features of the Scheme at a glance
- Apply to ‘Service Providers located in India’ instead of ‘Indian Service Providers’ and hence provides for rewards to all Service providers of notified services, who are providing exporting services from India and having minimum net foreign exchange earnings of USD 15,000 in the preceding financial year.
- Rate of reward under SEIS are based on net foreign exchange earned.
- Benefit of SEIS is extended to SEZ Units. However it continues to be part of ineligible exports of the scheme. Irrespective of this oversight, it is believed that Government intends to extend the benefit to SEZ
- Reward issued as duty credit scrip is freely transferable and usable as
- Payments of customs duties for imports of inputs or goods
- Payments of excise duties on domestic procurement of inputs or goods, including capital goods
- Payment of service tax on procurement of services
- For payment of custom duties in case of Export Obligation defaults. However, penalty/ interest need to be paid in cash.
- Payment of composition fee under FTP, for payment of application fee under FTP.
- 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 yet to be notified.
- One must hold active IEC at the time of rendering services for which rewards are claimed.
- Free foreign exchange earned through International Credit Cards and other instruments, as permitted by RBI shall also be considered for computation of value of exports.
Ineligible categories under SEIS
- Foreign exchange remittances other than those earned for rendering of notified services would not be counted for entitlement.
- 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.
Following is not to be considered for calculation of entitlement under the scheme
Foreign exchange remittances:
- Related to 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; and
- Earned through contract/regular employment abroad
- Payments for services received from EEFC Account;
- Foreign exchange turnover by healthcare institutions like equity participation, donations.
- Foreign exchange turnover by educational institutions like equity participation, donations.
- Service providers in telecom sector;
- 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
- Export of goods