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Posted on December 21, 2021
Using the Service Exports from India Scheme (SEIS) for your Export Business
The service sector is flourishing more than before and the exporting of this is one major sector that was gaining importance during the time of the pandemic which hit us harshly. The term for the Foreign Trade Policy 2015-2020 was increased by the Government of India and its allied department by one year which was supposed to increase the convenience and support provided to the exporters of the service.
Importance of SEIS
The SEIS which stands for The Service Exports from India holds the following importance especially during the year 2020-21:
- With the pandemic hindering our carrying out of business and earning income, the claiming of the refund with regard to the excess duties paid by the entrepreneur would be one major way through which the exporter of services can get a good amount of working capital with lower or no risk.
- This is the final year during which the exporters can claim the refund of these excess taxes paid by them after which the update is not available as of now.
- The exporters with high intensity of exporting to the foreign countries and clients can get the reimbursement of costs which are associated with the export of services from the country India.
- This is a great opportunity for the exporters involved in the export activity of notified services to the foreign countries without considering the nature of such service, the structure of the business, and the profile of such provider of service. The duty credit can be availed or claimed as a refund with the duty credit scrips which are issued to these exporters.
Advantages which are held by the Exporter of Service
The following advantages are held by the exporter of service when it comes to SEIS:
- The exporter of notified services can earn a part or a percentage of the sales made by them through export as a reward for the same. It shall be provided in the form of a duty credit scrip.
- It can also be made with free transfer increasing the benefit earned by the exporter of service.
- The exporter can also use the duty credit scrip for the payment of basic and additional customs duties and excise duties.
Services Eligible for SEIS
Following are the services which hold the eligibility for SEIS:
The following professional services are holding the eligibility for SEIS:
- Legal services
- 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
- Personnel of paramedics.
Services related to Research and Developments:
These research activities would include the same from the natural sciences, social science, humanities, and such other interdisciplinary research and development activities.
Other Business Activities
This would include the following:
- Market research
- Technical testing
- Energy distribution
- And other services like:
– Communication Services,
– Educational Services,
– Environmental Services,
– Construction and Engineering Services,
– Health-Related Services,
– Hotels and Services,
– Travel, recreational, cultural, and sporting services or activities,
– Transportation Services.
Pre-requisites to Apply
- An IEC code is mandatory such that the entity or the exporter of notified services can apply for the benefit provided under the SEIS.
- For the individual and the sole proprietorship entities, the minimum foreign exchange applied would be the US $ 10,000, during the financial year in which the services were provided by them.
- In the case of any other service exporters, the net foreign exchange criteria as applicable would be the US $ 15,000 during the year of providing the services.
What is Net Foreign Exchange?
The net foreign exchange can be computed by using the below-given formula:
(Less) Total Expenses for such services
(Less) Payments (If Any) for such services
(Less) Remittances for such services.
The Customs Department is the authority that would issue the exchange rate for conversion.
Who is not Allowed to Avail SEIS?
Following are the persons who are ineligible for availing any benefit under the SEIS:
- A person earning foreign exchange from donations, debt or loans, equity, etc.
- The entity with the presence of natural persons in such other foreign countries.
- A company that is engaged in the providing or sale of service from India to a foreign country through the commercial presence.
Following are the documents required to be furnished by the exporter:
- Bills and invoices
- Forward Inward Remittance Certificates (FIRCs)
- Bank Realization Certificates
- A Certificate that has been provided by the Credit Card Companies, that are international
- Landing certificates and the Port Registration documents
- Form ANF 3B, which is the application form
- Registration cum Membership Certificate or RCMC which is obtained from the export council as applicable
- The certificate issued by a Chartered Accountant is attached as an annexure, certifying that all the documents attached have been duly verified and also examined
- The Digital Signature Certificate which is an e-signature.
And it should be noted that this claim can be made by the exporter on a retrospective effect, which but shall be limited to the last or preceding three financial years. So, it shall start from the financial year 2017-18 to 2019-20, but with application of a late fee as applicable. And for the current financial year i.e., 2020-21, no penalty or fine be applicable.
- What is the applicable fees so as to avail SEIS benefit?
The applying exporter should pay INR 1,000/- along with the submission of the application.
- Should I register my business mandatorily with Service Export Promotion Council?
Yes, if your business is involved around the exporting of services then it is mandatory. But it shall not be considered as mandatory for the export business dealing in goods and not services.