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SEIS Scheme

An Overview of SEIS Scheme

The SEIS Scheme, also known as the Service Export from India Scheme, is a financial incentive provided to service exporters headquartered in India by the Directorate General of Foreign Trade (DGFT). This incentive programme is designed to encourage the export of services from India.

The SEIS Scheme was launched on April 1st, 2015, for a period of five years, as part of India's 2015–2020 Foreign Trade Policy. This programme was formerly known as the Served from India Scheme (SFIS) during the Financial Years 20092014. The four methods listed below can be used to export services to clients overseas.

Its primary goal is to increase and maximise India's exports of notified/selected services. Exporters of specific services are eligible for a 3%, 5%, or 7% incentive under the SEIS Scheme on the net foreign exchange gained in the form of Duty Credit Scrips. These SEIS scratch cards can be exchanged for cash or used to pay import duties. It is therefore just as effective as a financial incentive programme.

Who can participate in the SEIS Scheme?

  • Services provided in accordance with Modes 1 and 2 are the only ones that qualify for the SEIS Scheme. The SEIS Incentive is not available for Modes 3 and 4.
  • The following four modes can be used to export services to international clients:
    Cross-border trade in mode 1 is the provision of services from India to any other nation.
    For instance:
    1. A foreign company operating in London is receiving audited accounts from an Indian auditing firm. This might fall under the category of "Accounting & Auditing Services" export.
    2. An Indian firm conducting market research for a foreign firm situated in the United Arab Emirates [this may be considered an export of "Market research Services"]
    Consumption in a foreign country (Mode 2): India providing a service to a foreign national currently residing in India.
    For instance -
    1. American tourist living abroad in a 5-star hotel who uses an international credit card to pay in foreign currency for housing and meals. This might be categorised as "Hotel Services" for Export.
    2. An Indian travel agency plans and offers packages to foreign visitors who wish to visit India. These businesses are also referred to as inbound tour operators. This can fall under the category of "Travel agencies and Tour operator Services" being exported.
    Supply of a service from India through commercial presence in any other country is mode 3 (commercial presence).
    For instance, an Indian company with a Singapore presence can offer engineering services to Singapore-based clients. It refers to an Indian company's actual physical presence abroad.

Providing a service from India while natural individuals are present in another country is Mode 4: Presence of Natural individuals.
An Indian doctor might do surgery on a patient who is located in the USA, for instance. An Indian consultant visits his client in the UK to deliver services.

  • According to appendix 3D, the Service Export from India Scheme is exclusively open to service providers of the specified services.
    Software services exporters, for instance, are not eligible for SEIS.
  • The Service Exporter must have an Active IEC Code in order to claim the SEIS Benefit.
    For instance, if Company XYZ obtained its Importer Exporter Code (IEC Code) on April 1, 2016, all services rendered by the Company after that date (i.e., invoices generated after that date) will be qualified for SEIS incentives.
  • For purposes of applying for the SEIS Scheme, an eligible service exporter (which may be a company, LLP, or partnership) must have at least $15,000 USD in net free foreign exchange earnings for the year in which the services were rendered.
  • Similar to this, to qualify for the Service Export from India Scheme, Individuals and Sole Proprietors must generate a minimum of 10,000 USD in net free foreign exchange profits.
    Note: The Foreign Trade Policy 2015-2020 outlines exactly how to calculate net foreign exchange earnings, which are calculated as follows:
    net foreign exchange earnings = gross foreign exchange earnings - total foreign exchange payments/remittances/expenses borne by the service provider in the financial year.
  • SEIS Scheme is open to SEZ Units as well. However, SEIS incentives are not available for EOU, STP, BHTP, or EHTP Units.
  • Some eligible services are permitted to accept Indian rupees instead of foreign currency, which will be treated as foreign exchange, as payment for their services. There is a list of these services in (Appendix 3E).
  • For the purpose of calculating the value of exports, free foreign exchange obtained through foreign credit cards and other methods, as approved by the RBI, shall also be considered.

Table: SEIS Scheme for the FY 2019–20: Eligible Services and Benefit Rates

The SEIS plan for the FY 2019–20 has been announced in accordance with Notification No. 29/20152020, dated September 23, 2021, and the following items have been clarified in accordance with the circular.
  1. For services provided in FY 2019–20, exporters of services that are eligible may be eligible for Duty Credit Scrips under the SEIS.
  2. The rate of benefit will be based on net foreign exchange earned and will be disclosed in Appendix 3X.
  3. Under FY 2019–2020, the maximum Total Entitlement per IEC is Rs. 5 Crore.
  4. By December 31, 2021, applications must be submitted online in accordance with ANF 3B. The late cut will not be compensated. After December 31, 2021, the SEIS Scheme application will be considered time-barred.

According to the most recent notification, the rates for eligible services and benefits for FY 2019-2020 are listed below.

Categories that are ineligible under the SEIS Scheme

  • All payments made for providing services that are not listed in appendix 3D will not be taken into account for benefit.
  • This remittance specifically states that all other foreign exchange gains, such as those from equity or debt participation, contributions, receipts for loan repayment, etc., that are unrelated to the Service provided, shall not be taken into account.
  • It should be noted that the following Services will not be included in the entitlement computation under SEIS.
    • Foreign exchange remittances received for:
      • Specifically, the Financial Services Sector
        • Offering all kinds of loans in a foreign currency.
        • Realisation of client export revenue.
        • ADRs, GDRs, and other instruments are used in the issue of foreign equity.
        • Issuance of foreign currency bonds.
        • Offering securities and bonds in foreign currencies.
        • Selling financial products such as securities.
        • Other sorts of receivables that have nothing to do with the services that financial institutions provide.
      • While working under regular or contract in another country
        • Payments for various services that are received through the EEFC Account.
        • The healthcare institutions' involvement in equity, contributions, or any other form of foreign exchange trading.
        • Any other way that educational institutions might exchange foreign currency is through contributions, equity involvement, etc.
        • The sales of services provided by EOU/EHTP/STPI or BTP units are combined with the sales of the various DTA service providers.
        • All of the foreign exchange profits made by shipping companies or even airlines with neither an Indian origin nor a source country.
        • Providers of telecom sector services.

What is a Duty Credit Scrip or SEIS Scrip?

Duty Credit Scrip is the preferred method of payment for SEIS incentives. It is sometimes referred to as SEIS Licence or SEIS Scrip. It is a piece of identification that entitles the holder to pay import customs duties assessed on the importation of various products and services. These scrips are issued by the government, and DGFT is the issuing agency. The "Freely Transferable" nature of the SEIS Scrips applies to them. It implies that the Scrip Holder may sell the SEIS licence on the open market for a premium if they do not import anything.

How are SEIS Scrips used?

Let's have a look at Company M/S XYZ. Company exports services and has submitted an SEIS application. Consequently, they were given SEIS scrip worth Rs. 1 lakh (to provide an example). Currently, this company also engages in goods imports. In order to offset the Basic Customs Duty that is due to them at Customs during the import of Goods, they can set off this Credit of Rs. 1 lakh.

Company XYZ is engaged in the import of goods in the aforementioned example. But what if the company stops importing anything? What will happen to the stock? What will be done with the import duty credit? What advantages will the scrip have for the company?

Here, we examine the fundamental idea behind the freely transferable nature of rewards under SEIS.

The Duty Credit Scrip is thus freely transferable, sellable, and tradeable.

As a result, it can be sold to anyone interested in importing goods or services. The Duty Credit Scrip itself attests to the freely transferable character of Scrips.

SEIS is the only system with this feature. The prior Served from India Scheme (SFIS Scheme) did not include it.

In order to summarise, let's take the example of a company that exports services worth Rs. 1 crore in a given FY and receives a reward of Rs. 5 lakh in duty scrip (let's assume a reward rate of 5%). Now, the owner can choose between using it to import goods or services up to Rs 5 lakh without having to pay duties or selling it in the market (in the event that he chooses not to use it or import products) in order to receive cash in return for the duty scrip.

Therefore, it can be claimed that the benefits of the SEIS Scheme are available to all service providers and are just as valuable as a cash incentive.

A list of the paperwork needed for the SEIS Scheme

  • (IEC Code) Importer Exporter Code
  • ANF-3B (Aayat Niryat Form), an application form
  • CA Certificate
  • Statement (Table No. 4) illustrating the relationship between invoices and FIRCs
  • Report on Services
  • Invoice with a self-certified copy and FIRC's
  • Digital Signature Certificate (DSC) for the DGFT
  • Copy of RCMC
  • Required Declarations

How can I apply for the SEIS Scheme?

We will briefly cover the online process to submit the SEIS application after learning all the relevant details, terms, and conditions, and the list of documents linked to the SEIS Scheme.

Some Important points to note:

  • A DGFT Digital Signature should be used to submit SEIS Applications to jurisdictional DGFT offices.
  • The Exporter may submit one application each fiscal year under this scheme.
  • The incentives must be claimed within a year of the relevant financial year's conclusion. [Submission of a Claim after 12 months will result in Late-cut/Penalty].
  • If a claim is submitted more than three years after the end of a certain fiscal year, it will be rejected.
    For instance, the deadline to submit a claim for the fiscal year 2017–2018 is March 31, 2021.
  • The SEIS Application must be submitted electronically on the DGFT website before the physical submission of the necessary paperwork.
  • SEIS Scrip has a 24-month expiration date.

How can I apply online for the SEIS Scheme?

  • Please go to www.dgft.gov.in, the DGFT website.
  • Select Services and then Online Ecommerce Application.
  • Your browser will open a new tab. Please use this for SEIS for 2017–2018 and 2018–2019. The form will then open in front of you after you attach a DSC and log in using your credentials.
  • After choosing an option, you must complete the form's fields and submit it.
  • When exporting multiple services, you must classify them in accordance with Appendix 3D and include "Service Category Information" on the ANF 3B form.

How can we help you submit a claim for DGFT benefits under the SEIS Scheme?

  • We consult extensively with our clients in order to comprehend the scope of their services and ascertain if they would be qualified to make a claim or not.
  • To provide hassle-free services, we aid our clients in document preparation.
  • Create your online applications, then submit them to get the Licence under the SEIS plan.
  • DGFT Department has a committed Follow-Up staff to ensure quick SEIS processing.
  • Registration of the Licence is completed by our office in customs.
  • We also help with the papers needed to transfer a licence to the buyer and assist in the sale of licences at the best price possible.
  • Do the online transfer as well by entering the information on the DGFT website.
  • We follow a strict timeline to complete the entire process.

How come Afleo Consultants?

We are a group of highly skilled and knowledgeable individuals with years of experience in the field of DGFT Consultancy Services.

We only want to provide exporters with highly dependable services at the most affordable prices possible.

We continue to keep our clients informed of any impending laws and regulations pertaining to foreign trade policy as well as frequent policy modifications.

We have a distinct team for following up with the DGFT and have a thorough grasp of how the DGFT office operates, which aids us in quickly securing SEIS licences.

Frequently Asked Questions

Frequently Asked Questions

Providing services to foreign clients and receiving payment in freely convertible foreign currency are both considered service exports.

The Government of India created the Service Exports from India Scheme (SEIS Scheme) as a subsidy programme to encourage service exporters in India. Its main goal is to promote and increase the export of India's notified/selected services. The 3%, 5%, or 7% Incentive of the Net Foreign Exchange Earned in the Form of Duty Credit Scrips is payable to the Service Exporters who provide the Eligible Services.

The exporter has two options for exporting, namely the export of goods and the export of services. According to the government, both are equivalent because they create jobs and bring in significant foreign exchange for our country. As a result, it's crucial to promote and maximise both service and good exports. Hence Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS) are incentive programmes for the export of commodities and services, respectively.

The SEIS Scheme was launched on April 1, 2015, and it will be in effect until 2020 for 5 years.

With the use of a flow diagram, let's explain how SEIS Scheme India operates:

The service provider must verify whether or not the service he is offering qualifies for reimbursement. If his Service falls under Appendix 3D, he must submit an online application form ANF 3B with a digital signature and attach the pertinent paperwork listed above in order to be eligible for SEIS benefits.

No, the only Service that qualifies for SEIS Incentives is the one listed in Appendix 3D.

In the SEIS Scheme, net foreign exchange is defined as follows: net foreign exchange = gross foreign exchange earnings - total foreign exchange expenses, payments, and remittances for the fiscal year.

Yes, having an Import Export Code is required to receive SEIS benefits. There are no relaxations in this.

True, but not for all Services. Appendix 3E is a list of these qualifying services for which SEIS may be claimed when paid in INR.

Bank fees, GST on bank fees, foreign party tax deductions, and all other costs incurred in USD to provide the recognised Service are expenses for SEIS claims.

The application form for the SEIS Scheme (Services Exports from India Scheme) is called ANF 3B (Aayat Niryat form). To claim SEIS benefits, an ANF 3B application with all required supporting documentation should be submitted to the relevant DGFT Office. On June 28, 2018, the DGFT released a new version of the ANF 3B form.

All of the services that the applicant is providing may be listed on ANF 3B (Aayat Niryat form).

Yes, the SEIS Scheme requires the Registration cum Membership Certificate (RCMC).

The mission of the Service Export Promotion Council (SEPC), an export promotion council within the Commerce Ministry, is to boost service exports from India. A RCMC from any pertinent Export Promotion Council may be submitted if an IEC Holder is both a service exporter and a goods exporter, and its principal activity is the production, trading, and export of goods. Membership in SEPC is not required in this situation. However, SEPC Membership is required if an IEC Holder only engages in service export business.

There can only be one application per FY. Therefore, while filing the claim, be sure to include all of the invoices generated during the relevant financial year.

Yes. If the claim was incorrectly declared or not submitted in accordance with the correct procedures. Within three years of the license's issuance, the DGFT audit team may open some applications at random. This reopening of the scrips demonstrates how contradictory the SEIS Scheme may be. Its eligibility requirements, government incentives offered as part of it, and other details must be fully understood. By getting in touch with us, you can ask our in-house experts for assistance.

Only specific services are covered under the SEIS plan. The government's list of Eligible Services can be found in Appendix 3D.

The cost to claim the SEIS benefit is Rs. 1000 per application.

From the date of application, it takes 30 days. only if all of the documents are accepted by DGFT. Our expertise can assist the exporter in getting the scrips on schedule.

The deadline to submit an SEIS claim is one year after the fiscal year (FY) ended. If you submit an application after the 12-month window, DGFT will grant an SEIS licence with the appropriate late-cut.

Yes, the eligible service provider may submit an application for the three financial years prior to the present one (2020-2021), in which case he may submit an application for FY 2017–18, FY 2018–19, and FY 2019–20. However, the 2017–18 and 2018–19 late cut will be applicable for hiring for the fiscal year.

A late-cut, or penalty, will be applied if the exporter does not submit a claim for the SEIS benefit within 12 months of the end of the relevant financial year. Please see the table below for further information about late-cut.

The DGFT has not yet provided any clear information on it. SEIS is permitted till FY 201920. The DGFT has not yet made a decision regarding the continuation of SEIS for FY 2020–21.

The previous Service Export from India Scheme (SEIS), which was in effect from 2009 to 2014, was known as the Served From India Scheme (SFIS). The duty script that was provided under this SFIS Scheme was non-transferable.

The duty scrip granted as compensation for the service export under the SEIS Scheme is referred to as an SEIS Licence.

The Exporter may use the Scrips in one of two ways. A basic customs duty, or import duty, must be paid when importing anything. The credit may also be sold and encashed. For selling, you must create an invoice for the party to pay you and transfer the credit electronically using the DGFT website.

The DGFT issues SEIS Licences, which are used at Customs. As a result, the Customs authority must validate it to ensure its authenticity. The process of registering an SEIS licence is carried out at customs, where the exporter must present a valid licence for inspection before a duty waiver can be granted. Within 2-3 Working Days, we can assist with SEIS Licence registration at Customs.

Yes, it is required to register for an SEIS licence at Customs in order to confirm the validity of the licence or scrip issued by the DGFT.

Yes, we can use DSC to transfer SEIS licences online.

If the exporter chooses not to use the SEIS Licence for import, we can sell it to the importer.

The sale of MEIS and SEIS Licence is handled by a team at Afleo Consultant, and we offer the best selling price to our customers.

No, the sale of an SEIS Licence is not subject to GST.

No, IGST cannot be paid with an SEIS licence; only Basic Customs Duty may be.

The SEIS scrip can be transferred online by DSC by the exporter.

The validity of the SEIS Duty Credit Scrip is of 24 months from the issue of License.

The SEIS Scrip must be used within the validity period; after that, it can only be considered a piece of paper. Under the SEIS Scheme, revalidation of the Scrip is not allowed unless it has expired while in the possession of a governmental authority.