Service Exports from India Scheme (SEIS) as per Foreign Trade Policy 2015-20 (FTP 2015-20)

Posted on 17 April 2023 Category : Foreign Trade Policy 2015-20

Service Exports from India Scheme (SEIS) as per Import Export Policy 2015-2020 (FTP 2015-20)

Objective of Service Exports from India Scheme (SEIS) under Foreign Trade Policy of India (FTP 2015-20) is to encourage export of notified Services from India.

Eligibility

(a) Service Providers of notified services, located in India, shall be rewarded under SEIS, subject to conditions as may be notified. 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 preceding financial year 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 preceding financial year.

(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

(1) 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.

(2) Following shall not be taken into account for calculation of entitlement under the scheme

(a) Foreign Exchange remittances:

I. Related to Financial Services Sector

(i) Raising of all types of foreign currency Loans;

(ii) Export proceeds realization of clients;

(iii) Issuance of Foreign Equity through ADRs / GDRs or other similar instruments;

(iv) Issuance of foreign currency Bonds;

(v) Sale of securities and other financial instruments;

(vi) Other receivables not connected with services rendered by financial institutions; and

II. Earned through contract/regular employment abroad (e.g. labour remittances);

(b) Payments for services received from EEFC Account;

(d) Foreign exchange turnover by Educational Institutions like equity participation, donations etc.

(e) Export turnover relating to services of units operating under SEZ / EOU / EHTP / STPI / BTP Schemes or supplies of services made to such units;

(f) Clubbing of turnover of services rendered by SEZ / EOU /EHTP / STPI / BTP units with turnover of DTA Service Providers;

(g) Exports of Goods.

(h) 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.

(i) Service providers in Telecom Sector.

Entitlement under SEIS under Foreign Trade Policy 2015-20

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.

Remittances through Credit Card and other instruments for MEIS and SEIS

Free Foreign Exchange earned through international credit cards and other instruments, as permitted by RBI shall also be taken into account for computation of value of exports.

Effective date of schemes (MEIS and SEIS)

The schemes under IMPEX Policy 2015-20 (FTP 2015-20) shall come into force with effect from the date of notification of this Policy, i.e. the rewards under MEIS/SEIS shall be admissible for exports made/services rendered on or after the date of notification of this Policy.

The above information is a part of Export Import Training online

Comments

SADIK: On 17 January 2017 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. "Total expenses / payment / remittances of Foreign Exchange":- does this mean that total expense will only be considered if there is outward of forign exchange or the local expenses will also be calculated

MANJUNATH V: On 12 April 2017 We are manufacturer exporter and also service exporters. We also import materials for manufacture of goods and also spend forex to expenses relating to export of services. For the purpose of calculation of Free Net Foreign exchange to claim SEIS incentive, what all forex remittances will be deducted out of our forex earning from export of services. Whether expenses incurred solely for the purpose of Export of services will be deducted or even forex outflow towards import of Goods for manufacture of goods also will be deducted. Request an opinion.

dharmesh: On 02 July 2022 We have clarifications on SEIS, we are exporting for software services and product supply, we are falling under IT and IT enable services, we receive USD$ every month on regular base against our export services and product, we have IE Code. (1) how will we get SEIS scheme benefit (2) how will we apply the reward scheme application to whom government authority (3) for which government department will reimburse the payment? Please do the needful and brief me details.

Service Exports from India Scheme (SEIS) as per Foreign Trade Policy 2015-20 (FTP 2015-20)

Comments

Discussion Forum