SEIS or Service Export from India Scheme is reward-based initiative from the government, which aims to elevate the export of certain notified services and eventually boost the economy. Under the scheme, a service provider of the notified services, located in India, can claim additional benefits (Duty Credit Scrip) for their transaction on an international market, while still enjoying the perks as provided under GST regime.

As per Foreign Trade Policy of India 2015-2020, Service Providers of Notified Services in India, shall be rewarded under SEIS, as per the notified terms and conditions.

Notified Services under Service Exports from India Scheme (SEIS)

The various services eligible to claim benefits under the SEIS, as enlisted in Appendix 3D of the Foreign Trade Policy, 2015-20, are as follows:

1. Business Services

• • Professional services

Legal Services, Accounting, auditing and bookkeeping 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

R&D services on natural sciences, R&D services on social sciences and humanities, Interdisciplinary R&D services.

• • Rental/Leasing services without operators

Relating to ships, aircraft, other transport equipment, and other machinery and equipment

• • Other business services eligible

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 (excluding maritime vessels, aircraft or other transport equipment), Building-cleaning services, Photographic services, Packaging services, Printing, publishing and Convention services.

2. Communication Services

Audio-visual services: Motion picture and videotape production and distribution service, Motion picture projection service, Radio and television services, radio and television transmission services, Sound recording

3. Construction and related engineering services

General Construction work for the building, General Construction work for Civil Engineering, Installation and assembly work, Building completion and finishing work

4. Educational Services (SEIS benefits not available to Capitation fee)

Primary education services, Secondary education services, Higher education services, Adult education.

5. Environmental Services

Sewage services, Refuse disposal services, Sanitation and similar services

6. Health-related and Social Services.

Hospital services

7. Tourism and Travel-related Services.

• • Hotels and Restaurants (including catering)
  • Travel agencies and tour operator’s services
  • Tourist guides services

8. Recreational, cultural and sporting services (other than audio-visual services)

Entertainment services (including theatre, live bands and circus services), News agency services, Libraries, archives, museums and other cultural services, Sporting and other recreational services.

9. Transport services
   (Operations from India by Indian Flag Carriers only is allowed under Maritime transport services)

• Maritime Transport Services

Passenger transportation (Operations from India by Indian Flag Carriers only is allowed under Maritime transport services), Freight Transportation (Operations from India by Indian Flag Carriers only is allowed under Maritime transport services), Rental of vessels with crew (Operations from India by Indian Flag Carriers only is allowed under Maritime transport services), Maintenance and repair of vessels, Pushing and towing services, Supporting services for maritime transport.

• Air transport services

Rental of aircraft with crew, maintenance and repair of aircraft, Airport Operations and ground handling.

• Road Transport Services

Passenger transportation, Freight transportation, Rental of Commercial vehicles with operator, Maintenance and repair of road transport equipment, supporting services for road transport services.

• Services Auxiliary to All Modes of Transport
  Cargo-handling services, Storage and warehouse services, Freight transport agency services.

What is the Eligibility Criteria?

Prerequisites:

In order to claim the benefits of SEIS,

• The service provider should have minimum net free foreign exchange earnings of US$15,000 in the year of rendering the services.
• For Individual Service Providers and a sole proprietorship, such minimum net free foreign exchange earnings criteria would be US$10,000 in the financial year when the services have been rendered.
• The service provider shall have to have an active Import Export Code (IE Code) at the time of rendering such services for which rewards are claimed.

Eligibility of Services

The following modes of Services  are eligible under the SEIS scheme

• Services rendered in Mode I: Cross Border Trade i.e. Supply of a service from India to any other country
• Services rendered in Mode II: Consumption abroad i.e. Supply of a service from India to service consumers of any other country.

Conversely, the following mode of Supply of a Service are ineligible under the scheme

• Services rendered in Mode 3: Commercial Presence i.e. Supply of service from India through Commercial Presence in any other Country.
• Services rendered in Mode 4: Presence of Natural persons in any other country.

P.S: In case the IEC holder is a manufacturer of goods as well as service provider, then the foreign exchange earnings and Total Expenses/ payment/ remittances to be taken into account for the service provider only.

Eligibility of Foreign Exchange

The following exchange remittances would not be considered as a part of the Net Foreign exchange earned for the purpose of claiming incentives under this scheme:-

• The Foreign exchange remittances, other than those earned for rendering of notified services.
• Other sources of foreign exchange such as equity or debt participation, donations, receipts or repayment of loans, etc. and any other inflow of foreign exchange, unrelated to rendering of service.

How to apply for SEIS Benefits

In order to claim benefits under SEIS, the service provider is required to file an Online Application on the DGFT Server, along with the information on the relevant fields of information, which are to be filed in the SEIS ECOM Module. All the relevant forms, i.e. ANF3B and Annexures to ANF3B are available online, for more details on the forms applicable, you can refer to the link.

P.S: The due date to file an application for claiming incentives under this Scheme is 12 months from the end of the relevant financial year.

What are the incentives rewarded?

The service provider receives the incentive in the form of duty credit scrip. The service provider can use these duty scrips to pay off any import duty and GST or can sell the same in the market. The amount of duty scrips may range between 5 per cent to 7 per cent of Net Foreign Exchange depending on the nature of service.

What is Duty Credit Scrip?

The duty credit scrip acts as a pass, allowing the holder to import commodities with a concession (of an amount as notified in the scrip) in import duties. Furthermore, the scrips are freely transferrable and the exporter can sell the duty scrips in the market with Zero GST applicable on the sale.

The service provider can also request for the splitting of scrips, subject to a minimum of Rs. 5 Lakh each and multiples thereof, at the time of application. After the issuance, the split certificates would be permitted with the same port of registration as appearing on the original scrips in respect of EDI enabled ports. The facility of splits not allowed after issue of scrip in case of export through non-EDI Ports.

P.S: These scrips are valid for a period of 18 months from the date of issue and must be valid on the date on which such actual debit of duty is made.

What is Net Foreign Exchange? 

Net Foreign Exchange is the difference between gross earnings of foreign exchange and total expenses/payment/remittances of foreign exchange. Say, an outsourcing company exports services of $ 10,000 and forex expenses of $ 2,000. The company will have an NFE of $ 8,000 (i.e., $ 10,000 less $ 2,000). Assuming, a rate of 7 per cent, the company will be entitled to SEIS of $ 560 subject to realisation. There is no incentive in case the NFE is negative.

What is Risk Management System?

A Risk Management system is an authenticity regulatory Computer System in DGFT office. The system randomly selects 10% of cases (where scrips have already been issued) for each Regional Authority (RA) on a monthly basis. For these selected cases. The RA may call for original documents for further examination in detail.

In case any discrepancy and/or over claim is found on such examination, the applicant shall be under obligation to rectify such discrepancy and/or refund over claim in cash with interest. The original holder of scrip, however, may refund such over claim by surrendering the same scrip whether partially issued or fully unutilised, without interest.

The Regional Authority may also ask for original proof of landing certificate, annexures attached to ANF’s or any other document, which has been uploaded digitally at any time within 3 years from the date of issue of scrip.

Failure to submit such documents in original would make the applicant liable to refund the rewards granted with interest. It would be the responsibility of the applicant to maintain such documents, certificate etc. for a period of at least 3 years from the date of issuance of scrips.

IRIS GST is a GST Suvidha Provider (GSP) in India, that offers you premium GST Compliance tools like IRIS Sapphire, IRIS Garnet, IRIS Peridot, to help you file and comply with GST regulations without any hassle.

For any queries, feel free to connect with us at support@irisgst.com.