Seis & IT's Benifits
The objective of the scheme is to encourage and maximize the export of notified services from India. As per the scheme, a service provider in India can claim additional benefits (Duty Credit Scrip) for their international market transactions, while still enjoying the perks of GST
These benefits are a percentage of the net foreign exchange realized and are given as 3%, 5%, and 7% in the form of Duty Credit Scrips. These scrips in common terms are like shopping vouchers with a validity (24 months). They can be redeemed against any import duties to be paid. They can also be freely convertible to cash by selling to other parties (generally importers) at the current prevailing prices. Earlier, this Scheme was named as Served from India Scheme (SFIS Scheme) until 2014.
The four modes to export services to foreign clients can be:-
- Mode 1– Cross Border Trade (Supply of Service from India to any other Country).
- Mode 2 – Consumption Abroad (Supply of a Service from India to the consumer of any other country currently present in India)
- Mode 3 – Commercial presence (Supply of a Service from India through Commercial presence in any other Country).
- Mode 4 – Presence of an individual (Supply of a Service from India through the presence of individuals in any other Country).
For Example – An Audit firm in India is auditing the financial transactions of a Foreign Company based in London. [This may categorize as export of “Accounting & Auditing Services”]
For example – A American tourist staying in an Indian 5-star hotel and paying for the accommodation & food in Foreign Currency through International Credit Card. [This may categorize as Export of “Hotel Services”]
For Example – An Indian Company having an office in Singapore and providing Engineering Services to clients based in Singapore. It means the physical presence of an Indian company in a foreign country.
For example – An Indian surgeon performs surgery by visiting a patient based in the USA. / An Indian Consultant provides Services by visiting his client in the UK.
Let us now understand how does one qualify to use the SEIS Scheme
- Mode 1 & Mode 2 - Eligible under the SEIS Scheme
- Mode 3 & Mode 4 - Not eligible under the SEIS Scheme
- Some other services like export of software services are only qualified under SEIS.
- A Company, LLP, or Partnership should have minimum net free foreign exchange earnings of USD15,000 in the year.
- Individuals and Sole Proprietors should have minimum net free foreign exchange earnings of USD10,000 in the year.
- SEZ Units are also eligible for SEIS Scheme. However, EOU (Export oriented units), STP (Software technology parks), EHTP (Electronic hardware technology park) units are not qualified to claim SEIS incentives.
Now that we have understood the eligibility criteria, we should know the documents required to claim the same benefits.
- Application form ANF-3B (Aayat Niryat Form)
- CA Certificate
- Statement showing the nexus between Invoices and FIRC’s
- Write up of Services
- Self–Certified copy of invoice and FIRC’s
- DGFT Digital Signature Certificate (DSC)
- RCMC Copy
- Necessary Declarations
Let’s look at the procedure now :
- Step 1 - Login to - www.dgft.gov.in
- Step 2 - Click on Services -> Online Ecom Application.
- Step 3 - A new tab will open on your browser.
- Step 4 - Click on SEIS for 2017-2018 or 2018-2019 as per your requirement.
- Step 5 - Attach a DSC and login with your credentials to open the form
- Step 6 - After selecting an option, you have to fill in the details and submit the form.
- Step 7 - If you are exporting more than one Service, you have to follow the classification as per Appendix 3D and show the “Service Category Information” in the ANF 3B form.
Some of the Prerequisites for SEIS are :
- An IEC code (Importer-Exporter code), which is a business identification number required for exporting and importing from India.
Also, there are some important points to be noted before applying for any benefit under the SEIS Scheme:-
- SEIS Application should be made to jurisdictional DGFT offices using a DGFT Digital Signature.
- An Exporter can apply a single application for one financial year.
- The incentives have to be claimed within 12 months from the end of the relevant financial year. [Any Claim submitted after 12 months would invite Late-cut/Penalty].
- Any claim will be rejected if it is made after 3 Years from the end of the financial year.
[For Example – The last date of filing a claim for FY 2017-18 will be 31.03.2021]
- SEIS Application is to be submitted online on the DGFT website, followed by the physical submission of the required documents.
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