5% Cashback on Export of Services from India

INTRODUCTION

Cashback? Do we really get the Cashback from the government?

Yes, though not exactly the Cashback, but you will get the reward if you export the services outside India. The maximum reward will be 5% with a minimum of 3%. This is the export incentive scheme of the government written in chapter 3 of Foreign Trade Policy.

There are two types of export from India scheme;

1. Merchandise Export from India Scheme (MEIS)
2. Services Export from India Scheme (SEIS)

In this article, we will talk about the SEIS scheme for service providers.

CONCEPT OF SERVICES EXPORT FROM INDIA SCHEME (SEIS)

This scheme has been introduced by the government to encourage the export of certain notified services. Further another reason behind this is that government incentivized the export to cover the infrastructural issues and other reasons.

 

CONDITIONS FOR SEIS SCHEME

Before, you can count upon this scheme, make sure that you are eligible to use the scheme and fulfill the following conditions:

1. Only for Notified Services: The scheme benefit is only extended to the notified services and not all other services are covered under this definition.

Hence, check your services properly to avail the benefit.

2. Minimum earnings from foreign Exchange: This is one of the important criteria and condition for this scheme. You should have earned net foreign currency of US$ 15,000 ($ 10,000 for sole proprietor or individuals) in previous financial year.

Net foreign currency means 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. 

3. Foreign earnings of Service sector only: If you are manufacturer and service provider both, then foreign currency earnings of service sector will only be taken into account for the purpose of benefit under this scheme.

 

FORM OF REWARD (CASHBACK) ON EXPORT

The reward shall be in the form of Freely transferable duty credit scrips. These scrips can be used to pay the taxes like custom, service tax, and excise duty.

Further, in case you are not able to use it, then you can sell it to any other person for cash.

 

HOW TO CLAIM THE BENEFIT UNDER SCHEME

If you are covered under notified services and fulfill the above conditions then you can apply through the DGFT website by filing the ANF 3B form online. The process is mostly online and one can file using his digital signatures.

After submission, the proper officer shall approve the application after due verification.

 

HOW TO ACTIVATE THE DUTY CREDIT SCRIP

They duty credit scrip can be activated once it is registered with port in India. Once registered, it can be used on any port in India. Further, the scrip is valid till 18 months from the date of issue of the scrip.

This validity period cannot be extended.

 

CONCLUSION

Once, you try it properly, you may find many other practical problem, and that is why we are writing and sharing this article, so that we can help you out in case of any problem or query.

You can drop your query in the contact form.