The SEIS Scheme or Service Export from India Scheme is an incentive given by the Ministry of Commerce through the Directorate General of Foreign Trade (DGFT) to Service Exporters based in India. This reward scheme is to promote the export of services from India.
SEIS Scheme was introduced on 1st April 2015 for 5 Years under the Foreign Trade Policy of India 2015-2020. Earlier, this Scheme was named as Served from India Scheme (SFIS Scheme) for Financial Year 2009-2014. There are following four modes to export services to foreign clients.
Its main objective is to boost and maximize the export of notified/selected Services from India. Under SEIS Scheme, Exporters of selected Services are entitled to a 3% / 5% / 7% incentive on the Net Foreign exchange earned in the form of Duty Credit Scrips. These SEIS scrips can be used to pay Import duty or can be encashed by selling it to any Importer. Therefore, it is as good as cash Incentive Scheme.
Services rendered in the manner of Mode 1 & Mode 2 are only eligible for the SEIS Scheme. Mode 3 and Mode 4 are not eligible to claim SEIS Incentive.
Export of services to foreign clients can be undertaking in the following four modes: Mode 1– Cross Border Trade (Supply of Service from India to any other Country).
Service providers of notified Services, as per appendix 3D, are only eligible for Service Export from India Scheme.
To claim SEIS Benefit, The Service Exporter should have an Active IEC Code. For Example - Company XYZ has taken its Importer Exporter Code (IEC Code) on 01.04.2016, then all the Services provided by the Company after 01.04.2016 (i.e., Invoices generated after 01.04.2016) will be eligible for claiming rewards under SEIS.
Eligible Service Exporter (can be a Company, LLP, or Partnership) should have minimum net free foreign exchange earnings of 15,000 USD in the year of rendering services to apply for SEIS Scheme.
Similarly, Individuals and Sole Proprietors should have minimum net free foreign exchange earnings of 10,000 USD to be eligible to apply under the Service Export from India Scheme.
SEZ Units are also eligible for SEIS Scheme. But, EOU, STP, BHTP, EHTP Units are not eligible to claim SEIS incentives.
Some eligible services are allowed to accept Indian rupees towards their service charges instead of foreign currency, which shall be deemed foreign exchange. A list of such services is given in (Appendix 3E)
Free Foreign Exchange earned through international credit cards and other instruments, as permitted by RBI, shall also be taken into account for computation of the value of exports.