Service Exports from India Scheme (aka SEIS): Explained
Service Exports from India Scheme (aka SEIS) aims to incentivize export of services from India by facilitating duty scrip credit to specific exports. Under SEIS, Indian service providers would be rewarded for all eligible export of services. This article renders complete briefing on Service Exports from India Scheme formerly known as Served from Indian Scheme
Eligibility criteria for SEIS Scheme
- India-based Service Providers relating to notified services can apply for Service Exports from India Scheme.
- A service provider (LLP/Company/ Partnership entity) should have at least net free overseas exchange earnings of 15000 US dollars in the previous FY to become eligible for duty credit scrips
- For individual service providers or proprietorships, mini. net overseas earnings of 10000 dollars in the previous FY is required to become eligible for the scheme.
- Besides, to claim reward under the said scheme, the service provider must have a valid IEC i.e. Import Export Code at the time of facilitating such services against which rewards are claimed.
Note:
- Scheme would remain inaccessible in case of Negative Net Foreign Exchange earnings. The same is also true for ineligible categories as notified in public notice 45 released on 5/Dec/2017
- Service rendered under Modes 1 & 2 only is permitted for claim eligible services.
Expression for computing Net foreign exchange earnings
The following expression helps in calculating Net foreign exchange earnings:
Net Foreign Exchange = overall earning of foreign exchange – Overall expense or remittances or payment of Foreign Exchange
An Overview on Duty Credit Scrip
Service providers relating to eligible services have access to duty credit at specified rates on the overall foreign exchange earned
Duty credit scrips can serve various purposes such as payment of excise and custom duties, GST on procurement of service, custom duty in the event of error in meeting export liabilities under Advance Authorization/EPCG, etc.
Moreover, the SEIS scheme confers relaxation to the actual user condition & duty credit scrips & items imported utilizing duty credit scrips are easily transferable. Duty credit scrip shall remain valid for the duration of 18 months for the date of issuance.
Service Export from India Scheme (SEIS) Rate of Reward
Following are the services and rewards’ rate applicable for service exports that were made between 1-4-2015 to 30-09-2015:
Professional Services – 5% Rate of Reward
- Accounting, auditing and bookkeeping services
- Legal services
- Architectural services
- Taxation services
- Engineering services
- Urban planning and landscape architectural services
- Integrated engineering services
- Veterinary services
- Medical and dental services
- Services provided by midwives, nurses, physiotherapists and paramedical personnel
Research & Development (R&D) services – 5 per cent rate of reward
- R&D services on social sciences & humanities
- R&D services on natural sciences
- Interdisciplinary R&D services
Rental/Leasing Services in the absence of Operators – 5 per cent Rate of Reward
- Relating to aircraft
- Relating to ships
- Relating to other machinery and equipment
- Relating to other transport related machinery
Audiovisual Services – 5 percent Rate of Reward
- Videotape production or Motion picture or distribution service
- Sound recording
- Motion picture projection service
- Radio and television transmission services
- Radio and television services
Construction and allied Engineering Services – 5 percent Rate of Reward
- General Construction undertaking for building
- General construction undertaking for civil engineering
- Building completion and finishing work
- Installation and assembly work
Educational Services – 5 percent Rate of Reward
- Primary, Secondary and Higher education services
- Adult education
Environmental Services – 5 percent Rate of Reward
- Sewage services
- Sanitation and similar services
- Refuse disposal services
Health and Social Services – 5 percent rate of Reward
Tourism & Travel Services – 3 or 5 percent Rate of Reward
- Hotel (3 percent Rate of Reward)
- Restaurants (3 percent Rate of Reward)
- Travel agencies & tour operators services (5 percent Rate of Reward)
- Tourist guides services (5 percent Rate of Reward)
Recreational, Cultural & Sporting Services – 5 percent Rate of Reward
- Entertainment services (including theatre, circus services and live bands)
- News agency services
- Libraries, museums, archives & other cultural services
- Sporting & other recreational services
Transport & Auxiliary Services – 5 percent Rate of Reward
- Passenger transportation
- Rental of vessels with crew
- Freight transportation
- Maintenance and repair of vessels
- Supporting services for maritime transport
- Pushing and towing services
- Rental of aircraft with crew
- Airport Operations and ground handling
- Maintenance and repair of aircraft
- Rental of commercial vehicles with the operator
- Supporting services for road transport services
- Maintenance and repair of road transport equipment
- Storage and warehouse services
- Freight transport agency services
- Cargo-handling services
Other Business Services – 3 percent Rate of Reward
- Advertising services
- Management consulting service
- Market research & public opinion polling services
- Services concerning management consulting
- Technical testing & analysis services
- Services incidental to agricultural, hunting & forestry
- Services incidental to mining
- Services incidental to fishing
- Services incidental to energy distribution
- Services incidental to manufacturing
- Investigation and security
- Placement and supply services of personnel
- Related scientific & technical consulting services
- Maintenance & repair of equipment (excluding aircraft, maritime vessels, or other transport equipment)
- Photographic services
- Building-cleaning services
- Packaging services
- Convention services
- Printing, publishing
Foreign Exchange or Remittance that are not eligible under SEIS Scheme
Foreign exchange remittances except those earned for facilitating of notified services would stand ineligible for entitlement. Therefore, other modes of foreign exchange earnings like donations, equity or debt participation, receipts of repayment of loans, and other influx of foreign exchange [1] , not related to rendering of service, shall not be eligible under the scheme.
As cited above, the service provides must have IEC registration at the time of facilitating such services against which rewards are claimed.
Conclusion
SEIS Scheme encourages service export from India by facilitating duty scrip credit to eligible exports. This would help service sector to expand its footprint beyond existing market and frequently engaged with cross-border transaction for increased revenue.
