Service Exports from India Scheme replaced the Served from India Scheme under the Foreign Trade Policy in an effort to remove the plethora of restrictions of use of scrip. It also expands the scope of the earlier scheme and applies to service providers located in India and who are providing services from India irrespective of the constitution of the service provider.

The objective of Service Exports from India Scheme is aimed to encourage export of notified services from the country. It also aims to boost SMEs and MSMEs, creation of job as well as to maintain a stable and strong currency. This also leads to a strong economic infrastructure for the country.
Eligibility of SEIS

(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 the preceding financial year.
(c) Payment in Indian Rupees for service charges earned on specified services shall be treated as a 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 a service provider, then the foreign exchange earnings and Total expenses/payment/remittances shall be taken into account for the service sector only.
(f) In order to claim a reward under the scheme, the Service provider shall have to have an active IEC at the time of rendering such services for which rewards are claimed.
In essence, Duty credit scrips can be used for the settlement of Excise Duty, Customs Duty, Service Tax and Settlement of Default of EPCG claims.

If you’d like to understand more about credit scrips, you can get in touch with ASC Group who are the top chartered accountant firms in Delhi offering all accounting and financial services for individuals and corporates under one roof.