Service exporters can avail of government incentives through the Service Exports from India Scheme (SEIS), which is among the most valuable. The scheme, introduced as part of the Foreign Trade Policy (FTP) 2015- 2020, is intended to encourage businesses in India to export services and expand their operations worldwide. If you are a service provider exporting your knowledge to a foreign country, SEIS can help you be rewarded, grow your business, and become more competitive. This manual addresses the nature of the SEIS, eligibility, benefits claim, and how you can use the scheme to benefit your export business.
What is the Service Exports From India Scheme (SEIS)?
The SEIS is a government program aimed at promoting the export of notified services from India. It offers financial incentives to its qualified service exporters in the form of duty credit scrips, which can be used for several import incentives.
These duty credit scrips may be:
- Used to pay customs duties
- Used as a payment of excise duties (where applicable).
- Sold out or moved to other companies.
- Capital goods or raw materials.
The main aim is to motivate service providers to increase profits in foreign exchange by making it easier and cheaper to operate an export business.
Who Qualifies to Receive SEIS Benefits?
The eligibility requirements for SEIS are:
- Indian-based service providers.
- Earning foreign exchange, service exporters.
- Services: The companies in the FTP are listed in the 3D Appendix in Appendix 3D.
- Corporations, Limited partnerships, sole proprietorships, and partnerships.
- Those who have service export income.
The following are some of the commonly eligible categories of services:
- Engineering services
- Legal services
- IT and software services
- Accounting and auditing
- R&D services
- Tourist and travel-related services.
- Medical and diagnostic services.
- Transport and logistics services.
In case your business is involved in such categories and receives payment in foreign currency, you are allowed to receive SEIS benefits.
The Benefit of SEIS to Your Export Business
- Financial Support in the form of Duty Credit Scrips: SEIS enables service exporters to receive rewards on the net foreign exchange earnings ranging between 3-7 percent. These advantages save directly on the cost of operations and increase the profit margins.
- Greater Global Competitiveness: SEIS offers lower costs of importation, technology upgrades, and equipment, which facilitate international competition on the part of the service providers.
- Better Cash Flow of Growing Businesses: Duty credit scrips may be disposed of at the open market, and this may provide supplementary cash to be used in expansion, hiring or marketing.
- Credibility and Faith in International Markets: Government incentives help establish credibility with foreign customers and enhance the business’s credibility.
Eligibility Criteria for SEIS Benefits
1. Minimum Net Foreign Exchange Earnings
To qualify, one must have earned a minimum amount of net foreign exchange (NFE) in the relevant financial year.
2. Proper Filing of IEC and RCMC
The claimant must have:
- Valid Import Export code (IEC).
- Registration cum Membership Certificate (RCMC) by the concerned Export Promotion Council.
3. Service Should Be Rendered in India or Out of India
The following service should be provided:
- From India to outside India
- India to the foreign consumer.
4. The Money Should be Paid in a Foreign Currency
Only the earnings in the form of foreign exchange can be qualified including:
- USD
- EUR
- GBP
- Other convertible currencies.
Nepal and Bhutan Payments are not covered by SEIS.
How to Apply for SEIS Benefits?
Step 1: Preparation of Required Documents
You will need:
- IEC
- RCMC
- FIRC/BRC documents
- Export receipts and invoices.
- Digital signature (DSC)
- CA- statement of foreign exchange earnings.
Step 2: Login to the DGFT Portal
Go to DGFT portal and use your credentials to log in. Make sure your IEC is up to date and connected.
Step 3: The SEIS Application Module is chosen
Go to:
Services – SEIS – Request Service Exports Incentives.
Step 4: Enter Export Details
Fill in:
- Financial year
- Service category
- Net foreign exchange earnings.
- Supporting documents
Step 5: Pay the Application Fee
There is a small fee as a government fee based on the amount of the claim.
Step 6: Submit the Application
After being posted, you can follow the status of your application in DGFT’s dashboard.
How to Use Duty Credit Scrips Received Under SEIS?
SEIS scripts can be of great use with respect to reducing costs and improving profitability.
1. Using Scripts for Import Duties
- The scrips can be used to pay:
- Basic Customs Duty (BCD)
- Additional duties
- Safeguard duties
- Anti-dumping duties
This aids in lowering the cost of importing equipment, raw materials, or tools required in the expansion of the business.
2. Selling the Duty Credit Scrips
When you do not require them to import, then you can resell the scrips to another importer.
The sale value is instant working capital for your business.
Purchasing Capital Goods with Scrips
SEIS scrips are being used by many service exporters to acquire:
- IT infrastructure
- Machinery
- Specialized equipment
- Software tools
This develops long-term assets without huge financial investments.
Mistakes to Be Careful of when Claiming SEIS
- Failure to keep adequate FIRC/BRC documents.
- Improper service classification.
- Late submission of the application.
- Benefit claiming without a proper IEC/RCMC.
- Mismatch between invoices and bank receipts.
One mistake can result in rejection; therefore, make sure the documents are correct and up to date.
Conclusion
India has a robust scheme, the Service Exports from India Scheme (SEIS), that serves the needs of service exporters seeking to go global. SEIS offers charge credit scrips, reducing the costs associated with imports, thereby strengthening your business financially and competitively. For new and expanding exporters, learning how to access SEIS benefits and apply them effectively would, in many ways, increase profitability and enable them to establish a sustainable export business.
