SEIS: Indirect Tax Saving Opportunity

Service Export from India Scheme (SEIS)
………. An opportunity for Indirect Tax Saving

Content
Overview
Eligibility to Scheme
Restriction to Scheme
Benefits to Scheme
SEIS vs SFIS
Frequently Asked Questions
Page 2 Service Export from India Scheme (SEIS)
Frequently Asked Questions
Role of Professionals
Specified list of services

SEIS : An Overview
Objective
Encouragement of
service export from
India
Benefit
Duty credit
scripts
Eligibility
Service Provider
and
Specified services
Period of Benefit
& Restrictions
Period &
Remittances
Computation
Net Foreign
Exchange

Service provider exporting specified services
What qualifies as From India to any other Country
Specified services List of eligible services (Refer Annexure 1)
Eligibility to Scheme
What qualifies as
Export of service
From India to any other Country
From India to service consumer of any other country in India
From India through commercial or physical presence in territory of any
other country
In India relating to exports paid in free foreign exchange or in INR
considered as paid in free foreign exchange by RBI
From India through the presence of natural person in territory of any
other country
Service Export from India Scheme (SEIS)Page 4

Positive NFE Benefit linked to Net Foreign Exchange Earnings
NFE = Forex inflow for services provided- Forex expenditure
Eligibility to Scheme .. Continued
Minimum NFE
For Individual and Sole Proprietorship= $10,000 in preceding FYFor Individual and Sole Proprietorship= $10,000 in preceding FY
For Others = $15,000 in preceding FY
Other
Service provider shall have an active IEC at the time of rendering such
services for which rewards are claimed.
Application
Last date for filing application is 12 months from end of relevant year. eg.
for FY 2015-16, the last due date is 31 March 2017

Free foreign exchange remittances other than those earned for rendering notified services
Loans, Equity / debt participation, sale of securities, donation, receipt
of repayment of loan etc.
Ineligible Foreign
exchange earned
Restrictions to Scheme
Income earned through contract/regular employment abroad (e.g
labour remittances)
Payments received from EEFC account in free foreign exchange
Export turnover of EOU/ STP/ BTP/ EHTP unit or supplies made to
such units as well as clubbing of turnover above units with turnover
of DTA units
Export of goods
Service Provider in Telecom Sector
Earning by Airlines and Shipping line service providers plying from
one country to another country routes without touching India at all

Duty credit scrip equivalent to 3% or 5% of Net Free Foreign Exchange earned
Scrips can be used for payment of Custom Duty/Excise Duty/ Service
Tax for procurement of goods or services relevant to the business of
the applicant)
Service provider
Manufacturing
business of Service
Service providers also engaged in manufacturing activity can use the
Benefits of Scheme
business of Service
provider*
Service providers also engaged in manufacturing activity can use the
SFIS scrip for importing / domestic sourcing of capital goods
including spares for manufacturing
Transferability Duty Credit Scrip are freely transferable
Scripts shall remain valid for 18 month for use from the date of issue by RA
Cenvat Credit or
Drawback
Debits made from the scrip eligible for Cenvat credit or Drawback

Export of Services (SFIS vs SEIS)
Particulars Chapter 03 FTP 2009-14 Chapter 03 FTP 2015-20
Export of Services SFIS was available for the notified
services.
SEIS is available for the notified
services
Transferability Transferable to only related person
with 26% equity control
Freely Transferable
Frequency of the Application Monthly/Quarterly/Annually at the
Option of the exporter.
Annually
Rate of the Benefits 10% 3% or 5%
Utilization of scripts
Utilization of scripts
- Payment of the input Service Tax Not Allowed Allowed
- Import of the Input Not Allowed Allowed
- Re-credit of the script utilized
Amount
Not Allowed Allowed
Export by the SEZ Units Not Eligible Eligible
Appendix for the Notified Services Appendix 41 Appendix 3E
Minimum Foreign Exchange earning
required for eligibility.
Individual Rs.500000/-
Others Rs.1000000/-
Individual or Proprietor USD 10000
Other 15000 USD.

Frequently Asked Question (FAQ)
What is the name of form in which application for obtaining scripts under SEIS made to
DGFT ?
An application for grant of duty credit scrip is to be filed by the exporter in Form ANF 3B
How is the application to be filed manually or online?
An application for grant of duty credit scrip shall be filed online for a financial year on annual
basis in ANF 3B using digital signature.
Where the application form is to be filed?
Where the application form is to be filed?
Applicant shall have option to choose Jurisdictional RA on the basis of Corporate Office/
Registered Office/Head Office / Branch Office address endorsed on IEC for submitting
application/applications under SEIS. This option need to be exercised at the beginning of financial
year. Once an option is exercised, no change would be allowed for claims relating to that year.
Where is the port of registration of duty credit scripts ?
The applicant can choose any port as port of registration and mention it in the application at the
appropriate column. RA will issue the scrip with such port of registration. Such Duty credit scrip
needs to be registered at the port of registration of duty credit.

Whether scripts can be splited into multiple numbers and whether the issued scripts can be
further re-split into multiple numbers ?
On request the authority can issue Duty Credit Scrip subject to a minimum of Rs. 5 Lakh each and
multiples thereof.
Further, Once Duty Credit Scrip has been issued, request for splits can be permitted with same
port of registration as appearing on the original Scrip. The above procedure shall be applicable
only in respect of EDI enabled ports. For Non-EDI ports this facility is not allowed.
Whether provision of new scheme (SEIS) would be applicable on the unutilized scripts issued
Whether provision of new scheme (SEIS) would be applicable on the unutilized scripts issued
under old scheme (SFIS) ?
Para 3.14 of FTP and Para 3.05 of FTP Handbook of Procedure provides that the provisions of old
scheme shall be applicable on the unutilized scripts.
For services rendered upto 31 March 2015, which were eligible for duty credit scripts under the
old scheme and scripts are issued post 01 April 2015, whether provision of new scheme (SEIS)
would be applicable on the same ?
Para 3.14 of FTP and Para 3.05 of FTP Handbook of Procedure provides that the provisions of old
scheme shall be applicable on the scripts issued under the old scheme

Whether scripts can be utilized for import of goods from private/public bonded warehouse?
Yes, scripts can be used subject to fulfillment of para 2.36 of FTP and terms and condition of DoR
notification.
What would happen of scripts in case of re-export of defective/unfit goods ?
In case of re-export of defective good where custom duty on import has been paid through
utilization of scripts, the custom authorities may issue script utilization certificate to the exporter.
Basis the certificate, upon application, fresh scripts can be issued by concerned RA to the extent of
98% of debited amount, with same port of registration and valid for a period equivalent to balance
98% of debited amount, with same port of registration and valid for a period equivalent to balance
period available on date of import of the defective / unfit goods.

Ensuring maximum quantum of benefit to the assessee
Eligibility of various specified services vis-à-vis various business
models
Eligibility of various foreign exchange remittance
Detailed Analysis
Role of Professionals
Calculation of NFE for every eligible category of service provider
Preparation and filing of application
Follow up with authorities for issuance of scrips
Application
Representation /
Clarification Advocacy on issues that are not clear in the policy

Specified list of services … Annexure 1
Sl
No
Nature of Service CPC Code Reward (%
of NFE)
1 Business Services
A. Professional Services
a Legal services 861 5
b Accounting, auditing and bookkeeping services 862 5
c Taxation services 863 5
Page 13
d Architectural services 8671 5
e Engineering services 8672 5
f Integrated engineering services 8673 5
g Urban planning and landscape architectural services 8674 5
h Medical and dental services 9312 5
i Veterinary services 932 5
j Services provided by midwives, nurses, physiotherapists and
paramedical personnel
93191 5

Sl
No
of NFE)
B Research and Developmental Services
a R&D services on natural sciences 851 5
b R&D services on social sciences and humanities 852 5
c Interdisciplinary R&D services 853 5
C Rental/Leasing Services without operator
a Relating to ships 83103 5
Page 14
a Relating to ships 83103 5
b Relating to aircraft 83104 5
c Relating to other transport equipment 83101, 83102,
83105
5
d Relating to other machinery and equipment 83106-83109 5
D Other Business Services
a Advertising services 871 3
b Market research and public opinion polling services 864 3

Sl
No
of NFE)
c Management consulting service 865 3
d Services related to management consulting 866 3
e Technical testing and analysis services 8676 3
f Services incidental to agricultural, hunting and forestry 881 3
g Services incidental to fishing 882 3
h Services incidental to mining 883, 5115 3
Page 15
h Services incidental to mining 883, 5115 3
i Services incidental to manufacturing 884-885 3
j Services incidental to energy distribution 887 3
k Placement and supply services of personnel 872 3
l Investigation and security 873 3
m Related scientific and technical consulting services 8675 3
n Maintenance and repair of equipment (not including maritime
vessels, aircraft or other transport equipment)
633
8861-8866
3

Sl
No
of NFE)
o Building- cleaning services 874 3
p Photographic services 875 3
q Packaging services 876 3
r Printing, publishing 88442 3
s Convention services 87909 3
2 Communication Services
Page 16
2 Communication Services
Audiovisual services
a Motion picture and video tape production and distribution
service
9611 5
b Motion picture projection service 9612 5
c Radio and television services 9613 5
d Radio and television transmission services 7524 5
e Sound recording n.A 5

Sl
No
of NFE)
3 Construction and Related Engineering Services
a General Construction work for building 512 5
b General Construction work for Civil Engineering 513 5
c Installation and assembly work 514, 516 5
d Building completion and finishing work 517 5
Page 17
4 Education Services (Please refer Notes)
a Primary education services 921 5
b Secondary education services 922 5
c Higher education services 923 5
d Adult education 924 5
5 Environmental Services
a Sewage services 9401 5

Sl
No
of NFE)
b Refuse disposal services 9402 5
c Sanitation and similar services 9403 5
6 Health Related and Social Services
a Hospital services 9311 5
7 Tourism and Travel Related Services
Page 18
A Hotels and Restaurants (including catering)
a Hotel 641-643 5
b Restaurants (including catering) 641-643 5
B Travel agencies and tour operators services 7471 5
C Tourist guides services 7472 5
8 RECREATIONAL, CULTURAL AND SPORTING
SERVICES (other than audiovisual services)
a Entertainment services (including theatre, live bands and
circus services)
9619 5

Sl
No
of NFE)
b News Agency Services 962 5
c Libraries, archives, museums and other cultural services 963 5
d Sporting and other recreational services 964 5
9 Transport Services
A Maritime Transport Services (Please refer Notes)
Page 19
a Passenger transportation* 7211 5
b Freight transportation* 7212 5
c Rental of vessels with crew * 7213 5
d Maintenance and repair of vessels 8868 5
e Pushing and towing services 7214 5
f Supporting services for maritime transport 745 5

Sl
No
of NFE)
B Air Transport Services
a Rental of aircraft with crew 734 5
b Maintenance and repair of aircraft 8868 5
c Airport Operations and ground handling 7213 5
C Road Transport Services
Page 20
a Passenger transportation 7121, 7122 5
b Freight transportation 7123 5
c Rental of Commercial vehicles with operator 7124 5
d Maintenance and repair of road transport equipment 6112, 8867 5
e Supporting services for road transport services 744 5
D Services Auxiliary to All Modes of Transport
a Cargo-handling services 741 5

Sl
No
of NFE)
b Storage and warehouse services 742 5
c Freight transport agency services 748 5
Notes
The services and rates of rewards notified against them shall be applicable for services export
made between 1-4-2015 to 30-09-2015 only. The list of services/rate is subject to review with effect
made between 1-4-2015 to 30-09-2015 only. The list of services/rate is subject to review with effect
from 1-10-2015.
For Educational Services, SEIS reward shall not be available on Capitation Fee.
Under Maritime Transport Services marked with *[9A (a), (b) and (c)], the reward shall be limited
to Operations from India by Indian Flag Carriers only.

For Any queries or clarificationFor Any queries or clarification
You can reach us at
Vishal Tayal
TAG Advisors LLP
18/2822, 1ST Floor,
Ajmal Khan Road, Beadon Pura,
Karol Bagh, New Delhi-5
+91-9899-122879
cavishal.tayal@gmail.com

SEIS: Indirect Tax Saving Opportunity

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