Startup Legal Guide: Get upto 5% Incentives of your foreign income under Service Export from India Scheme (SEIS)

About Service Export from India Scheme (SEIS)

SEIS is one of the Service Exports from India Scheme launched by DGFT in Chapter 3 of Free Trade Policy 2015-20. This scheme aims to incentivize service exporters of India with the objective to encourage and maximize export of notified Services from India Under the scheme, service providers, located in India, would be rewarded under the SEIS scheme, for all eligible export of services from India.

How the net foreign exchange earnings are calculated?

Net foreign exchange earnings for the SEIS scheme is calculated as:

Net Foreign Exchange = Gross Earnings of Foreign Exchange – Total Expenses or payment or remittances of Foreign Exchange.

Can we claim the incentive as cash?

Unfortunately, No. The rewards under the scheme are not given in the form of money but in the form of Duty Credit Scrips. Duty Credit Scrip is a scrip issued by the DGFT and can be used to pay various duties/taxes to the Central Govt. Split certificates of such Duty Credit Scrip may also be issued, at the time of application and are freely transferable.

List of notified services along with the rate of reward

The following services and rates of rewards were applicable for services export made between 1-4-2015 to 30-09-2015:

• Professional Services – 5% Rate of Reward
  • 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
• Research and Development Services – 5% Rate of Reward
  • R&D services on natural sciences
  • R&D services on social sciences and humanities
  • Interdisciplinary R&D services
• Rental/Leasing Services without Operators – 5% Rate of Reward
  • Relating to ships
  • Relating to aircraft
  • Relating to other transport equipment
  • Relating to other machinery and equipment
• Audiovisual Services – 5% Rate of Reward
  • Motion picture and video tape production and distribution service
  • Motion picture projection service
  • Radio and television services
  • Radio and television transmission services
  • Sound recording
• Construction and Related Engineering Services – 5% Rate of Reward
  • General construction work for building
  • General construction work for civil engineering
  • Installation and assembly work
  • Building completion and finishing work
• Educational Services – 5% Rate of Reward
  • Primary education services
  • Secondary education services
  • Higher education services
  • Adult education
• Environmental Services – 5% Rate of Reward
  • Sewage services
  • Refuse disposal services
  • Sanitation and similar services
• Health and Social Services – 5% Rate of Reward
  • Hospital services
• Tourism and Travel Services – 3% or 5% Rate of Reward
  • Hotel (3% Rate of Reward)
  • Restaurants (3% Rate of Reward)
  • Travel agencies and tour operators services (5% Rate of Reward)
  • Tourist guides services (5% Rate of Reward)
• Recreational, Cultural and Sporting Services – 5% Rate of Reward
  • Entertainment services (including theatre, live bands, and circus services)
  • News agency services
  • Libraries, archives, museums, and other cultural services
  • Sporting and other recreational services
• Transport & Auxiliary Services – 5% Rate of Reward
  • Passenger transportation
  • Freight transportation
  • Rental of vessels with crew
  • Maintenance and repair of vessels
  • Pushing and towing services
  • Supporting services for maritime transport
  • Rental of aircraft with crew
  • Maintenance and repair of aircraft
  • Airport Operations and ground handling
  • Rental of commercial vehicles with the operator
  • Maintenance and repair of road transport equipment
  • Supporting services for road transport services
  • Cargo-handling services
  • Storage and warehouse services
  • Freight transport agency services
• Other Business Services – 3% Rate of Reward
  • 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
  • Convention services

Can startups apply for this SEIS scheme?

Yes. If you are providing an export of services and your foreign exchange remittances falls under ‘earned for rendering of notified services’, then you can get benefit from the Service Export from India Scheme (SEIS).

Who are not eligible under the SEIS scheme?

Those foreign exchange remittances or earnings that fall outside the scope of notified services, then such services will not be taken into consideration.

How to apply?

An Online Application needs to be filed on the DGFT Server and the relevant fields of information need to be entered in the SEIS ECOM Module. All the relevant forms which are ANF3B and Annexure to ANF3B are available online. You may also refer the link http://dgft.gov.in/links/appendices-and-anf-ftp2015-2020 on the DGFT Server to view the Forms applicable for SEIS Application.

• Online filing: An application for grant of duty credit scrip for eligible services rendered shall be filed online for a financial year on an annual basis in ANF 3B using a digital signature.
• Last date: The last date for filing application shall be 12 months from the end of the relevant financial year of the claim period.
• Jurisdiction: Applicant shall have the option to choose Jurisdictional Registering Authority on the basis of Corporate Office/ Registered Office/ Head Office/Branch Office address endorsed on IEC for submitting application/applications under SEIS.
• Start of the financial year: This option needs to be exercised at the beginning of the financial year.
• No changes: Once an option is exercised, no change would be allowed for claims relating to that year.
• Scrutiny of documents: RA shall process the application received online after due scrutiny.