Service Exports from India Scheme (SEIS)

Service Exports from India Scheme (SEIS) under Indian Foreign Trade Policy 2015-20 (FTP 2015-20) is one of the two schemes introduced in Foreign Trade Policy of India 2015-20, as a part of Exports from India Scheme. (The other scheme is Merchandise Exports from India Scheme (MEIS))

The details of Service Exports from India Scheme (SEIS) is given below under Foreign Trade Policy of India 2015-20, paragraph wise.
Nature of Rewards
Duty Credit Scrips shall be granted as rewards under Service Exports from India Scheme (SEIS). The Duty Credit Scrips and goods imported / domestically procured against them shall be freely transferable. The Duty Credit Scrips can be used for the following requirements:
(i) Payment of Customs Duties for import of inputs or goods, except items listed in Appendix 3A.
(ii) Payment of excise duties on domestic procurement of inputs or goods, including capital goods as per DoR notification.
(iii) Payment of service tax on procurement of services as per DoR notification.
(iv) Payment of Customs Duty and fee as per paragraph 3.18 of this Policy.

Service Exports from India Scheme (SEIS)

Objective of Service Exports from India Scheme (SEIS) is to encourage export of notified Services from India.
Eligibility
(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 preceding financial year.
(c) Payment in Indian Rupees for service charges earned on specified services, shall be treated as 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 service provider, then the foreign exchange earnings and Total expenses / payment / remittances shall be taken into account for service sector only.
(f) In order to claim reward under the scheme, Service provider shall have to have an active IEC at the time of rendering such services for which rewards are claimed.
Ineligible categories under SEIS
(1) Foreign exchange remittances other than those earned for rendering of notified services would not be counted for entitlement. Thus, other sources of foreign exchange earnings such as equity or debt participation, donations, receipts of repayment of loans etc. and any other inflow of foreign exchange, unrelated to rendering of service, would be ineligible.
(2) Following shall not be taken into account for calculation of entitlement under the scheme
(a) Foreign Exchange remittances:

Related to Financial Services Sector

(i) Raising of all types of foreign currency Loans;
(ii) Export proceeds realization of clients;
(iii) Issuance of Foreign Equity through ADRs / GDRs or other similar instruments;
(iv) Issuance of foreign currency Bonds;
(v) Sale of securities and other financial instruments;
(vi) Other receivables not connected with services rendered by financial institutions; and

Earned through contract/regular employment abroad (e.g. labour remittances);

(b) Payments for services received from EEFC Account;
(c) Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc.
(d) Foreign exchange turnover by Educational Institutions like equity participation, donations etc.
(e) Export turnover relating to services of units operating under SEZ / EOU / EHTP / STPI / BTP Schemes or supplies of services made to such units;
(f) Clubbing of turnover of services rendered by SEZ / EOU /EHTP / STPI / BTP units with turnover of DTA Service Providers;
(g) Exports of Goods.
(h) Foreign Exchange earnings for services provided by Airlines, Shipping lines service providers plying from any foreign country X to any foreign country Y routes not touching India at all.
(i) Service providers in Telecom Sector.
Entitlement under SEIS
Service Providers of eligible services shall be entitled to Duty Credit Scrip at notified rates (as given in Appendix 3D) on net foreign exchange earned.
Remittances through Credit Card and other instruments for SEIS
Free Foreign Exchange earned through international credit cards and other instruments, as permitted by RBI shall also be taken into account for computation of value of exports.
Effective date of scheme for SEIS
The schemes shall come into force with effect from the date of notification of this Policy, i.e. the rewards under SEIS shall be admissible for exports services rendered on or after the date of notification of this Policy.
Special Provisions
(a) Government reserves the right in public interest, to specify export products or services or markets, which shall not be eligible for computation of entitlement of duty credit scrip.
(b) Government reserves the right to impose restriction / change the rate/ceiling on Duty Credit Scrip under this chapter.
(c) Government may also notify goods in Appendix 3A which shall not be allowed for debiting through Duty Credit Scrips in case of import.
(d) Government may prescribe value cap of any kind for a product(s) or limit total reward per IEC holder under this chapter at any time.
Common Provisions
Transitional Arrangement
For the goods exported or services rendered upto the date of notification of this Policy, which were otherwise eligible for issuance of scrips under erstwhile Chapter 3 of the earlier Foreign Trade Policy(ies) and scrip is applied / issued on or after notification of this Policy against such export of goods or services rendered, the then prevailing policy and procedure regarding eligibility, entitlement, transferability, usage of scrip and any other condition in force at the time of export of goods or rendering of the services, shall be applicable to such scrips.
CENVAT/ Drawback
Additional Customs duty/excise duty/Service Tax paid in cash or through debit under Duty Credit scrip shall be adjusted as CENVAT Credit or Duty Drawback as per DoR rules or notifications. Basic Custom duty paid in cash or through debit under Duty Credit scrip shall be adjusted for Duty Drawback as per DoR rules or notifications.
Import under lease financing
Utilization of Duty Credit Scrip shall be permitted for payment of duty in case of import of capital goods under lease financing in terms of provision in paragraph 2.34 of FTP.
Transfer of export performance
(a) Transfer of export performance from one IEC holder to another IEC holder shall not be permitted. Thus, a shipping bill containing name of applicant shall be counted in export performance / turnover of applicant only if export proceeds from overseas are realized in applicant’s bank account and this shall be evidenced from e – BRC / FIRC.
(b) However, MEIS, rewards can be claimed either by the supporting manufacturer (along with disclaimer from the company / firm who has realized the foreign exchange directly from overseas) or by the company/ firm who has realized the foreign exchange directly from overseas.
Facility of payment of custom duties in case of E.O. defaults and fee through duty credit scrips
(a) Duty Credit Scrip can be utilised / debited for payment of Custom Duties in case of EO defaults for Authorizations issued under Chapters 4 and 5 of this Policy. Such utilization /usage shall be in respect of those goods which are permitted to be imported under the respective reward schemes. However, penalty / interest shall be required to be paid in cash.
(b) Duty credit scrips can also be used for payment of composition fee under FTP, for payment of application fee under FTP, if any and for payment of value shortfall in EO under para 4.49 of HBP 2015-20.
Risk Management System
(a) A Risk Management System shall be in operation whereby every month Computer system in DGFT
Headquarters, on random basis, will select 10% of cases for each RA where scrips have already been issued, under each scheme. RA in turn may call for original documents in all such selected cases 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 at the rate prescribed under section 28 A A of the Customs Act 1962, from the date of issue of scrip in the relevant Head of Account of Customs within one month. The original holder of scrip, however, may refund such over claim by surrendering the same scrip whether partially utilized or fully unutilized, without interest.
(b) Regional Authority may ask for original proof of landing certificate, annexures attached to ANFs or any other document, which has been uploaded digitally at any time within three years from the date of issue of scrip. Failure to submit such documents in original would make applicant liable to refund the reward granted along with interest at the rate prescribed under section 28 A A of the Customs Act 1962, from the date of issuance of scrip. It would be the responsibility of applicant to maintain such documents, certificate etc. for a period of at least three years from the date of issuance of scrips.
Status Holder
(a) Status Holders are business leaders who have excelled in international trade and have successfully contributed to country’s foreign trade. Status Holders are expected to not only contribute towards India’s exports but also provide guidance and handholding to new entrepreneurs.
(b) All exporters of goods, services and technology having an import-export code (IEC) number shall be eligible for recognition as a status holder. Status recognition depends upon export performance. An applicant shall be categorized as status holder upon achieving export performance during current and previous two financial years, as indicated in paragraph 3.21 of Foreign Trade Policy. The export performance will be counted on the basis of FOB value of export earnings in free foreign exchange.
(c) For deemed export, FOR value of exports in Indian Rupees shall be converted in US$ at the exchange rate notified by CBEC, as applicable on 1st April of each Financial Year.
(d) For granting status, export performance is necessary in at least two out of three years.
Status Category
Export Performance
One Star Export House 3 FOB / FOR (as converted) Value (in US $ million)
Two Star Export House 25 FOB / FOR (as converted) Value (in US $ million)
Three Star Export House 100 FOB / FOR (as converted) Value (in US $ million)
Four Star Export House 500 FOB / FOR (as converted) Value (in US $ million)
Five Star Export House 2000 FOB / FOR (as converted) Value (in US $ million)
Grant of double weightage
(a) The exports by IEC holders under the following categories shall be granted double weightage for calculation of export performance for grant of status.
(i) Micro, Small & Medium Enterprises (MSME) as defined in Micro, Small & Medium Enterprises Development (MSMED) Act 2006.
(ii) Manufacturing units having ISO/BIS.
(iii) Units located in North Eastern States including Sikkim and Jammu & Kashmir.
(iv) Units located in Agri Export Zones.
(b) Double Weightage shall be available for grant of One Star Export House Status category only. Such benefit of double weightage shall not be admissible for grant of status recognition of other categories namely Two Star Export House, Three Star Export House, Four Star export House and Five Star Export House.
(c) A shipment can get double weightage only once in any one of above categories.
3.23 Other conditions for grant of status
(a) Export performance of one IEC holder shall not be permitted to be transferred to another IEC holder. Hence, calculation of exports performance based on disclaimer shall not be allowed.
(b) Exports made on re-export basis shall not be counted for recognition.
(c) Export of items under authorization, including SCOMET items, would be included for calculation of export performance.

Privileges of Status Holders
A Status Holder shall be eligible for privileges as under:
(a) Authorisation and Customs Clearances for both imports and exports may be granted on self-declaration basis;
(b) Input-Output norms may be fixed on priority within 60 days by the Norms Committee;
(c) Exemption from furnishing of Bank Guarantee for Schemes under FTP, unless specified otherwise anywhere in FTP or HBP;
(d) Exemption from compulsory negotiation of documents through banks. Remittance / receipts, however, would be received through banking channels;
(e) Two star and above Export houses shall be permitted to establish Export Warehouses as per Department of Revenue guidelines.
(f) Three Star and above Export House shall be entitled to get benefit of Accredited Clients Programme (ACP) as per the guidelines of CBEC (website: http://cbec.gov.in).
(g) The status holders would be entitled to preferential treatment and priority in handling of their consignments by the concerned agencies.
(h) Manufacturers who are also status holders (Three Star/Four Star/Five Star) will be enabled to self-certify their manufactured goods (as per their IEM/IL/LOI) as originating from India with a view to qualify for preferential treatment under different preferential trading agreements (PTA), Free Trade Agreements (FTAs), Comprehensive Economic Cooperation Agreements (CECA) and Comprehensive Economic
Partnership Agreements (CEPA). Subsequently, the scheme may be extended to remaining Status Holders.
(i) Manufacturer exporters who are also Status Holders shall be eligible to self-certify their goods as originating from India as per para 2.108 (d) of Hand Book of Procedures.
(j) Status holders shall be entitled to export freely exportable items on free of cost basis for export promotion subject to an annual limit of Rs 10 lakh or 2% of average annual export realization during preceding three licencing years whichever is higher.

Here, the details of eligible exporters to claim SEIS scheme under Foreign Trade Policy 2015-20 are explained.

As per Foreign Trade Policy of India 2015-2020, Service Providers of notified services, located in India, shall be rewarded under SEIS, Service Exports from India Scheme 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 for SEIS scheme. Para 9.51 (i) and (ii) explains about service provider as below:

“Service Provider” means a person providing:
(i) Supply of a ‘service’ from India to any other country; (Mode1- Cross border trade)
(ii) Supply of a ‘service’ from India to service consumer(s) of any other country; (Mode 2-Consumption abroad)
List of Services eligible under Service Exports from India Scheme (SEIS) under Appendix 3D is being notified separately. However, for your immediate reference, the sectors included under SEIS scheme are given below. You may also refer para 3.07 to 3.12 of FTP and Para 3.04 of hand book of procedures of Foreign Trade Policy of India 2015-20 with other common procedural features applicable to SEIS.

Sl.No: 1. Business Services:

Professional services fall under eligible to claim SEIS scheme benefit.

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.
Admisible rate: 5%

Research and development services eligible to claim SEIS scheme benefit.

R&D services on natural sciences, R&D services on social sciences and humanities, Interdisciplinary R&D services.
Admisible rate: 5%

Rental/Leasing services without operators eligible to claim SEIS scheme benefit.

Relating to ships, Relating to aircraft, Relating to other transport equipment, Relating to other machinery and equipment
Admisible rate: 5%

Other business services eligible to claim SEIS scheme benefit.

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 (not including maritime vessels, aircraft or other transport equipment), Building- cleaning services, Photographic services, Packaging services, Printing, publishing and Convention services.
Admisible rate: 3%

Sl. No. 2. COMMUNICATION SERVICES eligible to claim SEIS scheme benefit.
Audiovisual services
Motion picture and video tape production and distribution service, Motion picture projection service, Radio and television services, Radio and television transmission services, Sound recording
Admisible rate: 5%

Sl. No. 3. CONSTRUCTION AND RELATED ENGINEERING SERVICES eligible to claim SEIS scheme benefit.
General Construction work for building, General Construction work for Civil Engineering, Installation and assembly work , Building completion and finishing work
Admisible rate: 5%

Sl. No. 4 EDUCATIONAL SERVICES eligible to claim SEIS scheme benefit. (Under education services, SEIS shall not be available on Capitation fee)
Primary education services, Secondary education services, Higher education services, Adult education
Admisible rate: 5%

Sl. No. 5 ENVIRONMENTAL SERVICES eligible to claim SEIS scheme benefit.
Sewage services, Refuse disposal services, Sanitation and similar services
Admisible rate: 5%

Sl. No. 6. HEALTH-RELATED AND SOCIAL SERVICES eligible to claim SEIS scheme benefit.
Hospital services
Admisible rate: 5%

Sl. No. 7. TOURISM AND TRAVEL-RELATED SERVICES eligible to claim SEIS scheme benefit.

Hotels and Restaurants (including catering)
Hotel – Admisible rate 3%
Restaurants (including catering) Admisible rate 3%
Travel agencies and tour operators services Admisible rate 5%
Tourist guides services Admisible rate 5%

Sl. No.8.RECREATIONAL, CULTURAL AND SPORTING SERVICES eligible to claim SEIS scheme benefit.(other than audiovisual 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
Admisible rate: 5%

Sl. No. 9. TRANSPORT SERVICES eligible to claim SEIS scheme benefit. (Operations from India by Indian Flag Carriers only is allowed under Maritime transport services. )

Maritime Transport Services eligible to claim SEIS scheme benefit.

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
Admisible rate: 5%

Air transport services eligible to claim SEIS scheme benefit.

Rental of aircraft with crew, Maintenance and repair of aircraft, Airport Operations and ground handling
Admisible rate: 5%

Road Transport Services eligible to claim SEIS scheme benefit.

Passenger transportation, Freight transportation, Rental of Commercial vehicles with operator, Maintenance and repair of road transport equipment, Supporting services for road transport services
Admisible rate: 5%

Services Auxiliary To All Modes Of Transport eligible to claim SEIS scheme benefit.

Cargo-handling services, Storage and warehouse services, Freight transport agency services
Admisible rate:5%