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BENEFIT TO EXPORTERS UNDER FOREIGN TRADE POLICY 2015-2020 MEIS & SEIS

Customs - Import - Export - SEZ - By: - Srikantha Rao T - Dated:- 15-5-2015 Last Replied Date:- 16-5-2015 - The Foreign Trade Policy 2015-2020 effective from 1st of April 2015 provides quite a few incentives to exporters of goods and services in India considering the Make In India initiative of the Central Government. Two schemes which merit attention here considering the benefits extended are MEIS i.e. Merchandise Exports from India Scheme and SEIS i.e. Service Exports from India Scheme. These .....

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on input services as the case may be. Separate set of Notifications have been issued for both these schemes under Central Excise, Service Tax and Customs respectively. While the Notifications pertaining to Central Excise and Customs deal with procurement of goods by the holder of scrip, the one pertaining to Service Tax deals with procurement of input services by the holder of the scrip. Readers may note that procurement of goods or services would be possible against both these scrips. For insta .....

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ecial Importance) Act, 1957 and additional duty of excise u/s 3 of Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 would be covered. It is worthwhile noting that the benefit of procurement under the scrips extends to capital goods as well. This term has been defined in Paragraph 9.08 of the Foreign Trade Policy and would be comprehensive enough to include within its ambit, any plant, machinery, equipment or accessories required directly or indirectly for manufacture or prod .....

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rip In order to get the scrip, the exporter would be required to export notified products to notified markets. The list of markets and products has been notified vide Public Notice 2/2015-2020 dated 01st April 2015 by Director General Foreign Trade. While a detailed list of items with reference to their HSN code has been notified, the countries notified number in excess of 200 with the countries being divided into three categories i.e. category A, B and C. Exports to category C countries would g .....

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e lower of realized FOB value of exports in free foreign exchange or on FOB value of exports in Shipping Bill in free foreign exchange depending on the product exported and the country to which it is exported. This would be given on the duty credit scrip which shall be issued with a single port of registration which would also be the port of export. Once registered at an EDI port, scrip can be automatically used at any EDI port for import and at any manual port under Telegraphic Release Advise ( .....

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nal Central Excise officer (having jurisdiction over supplier s premises/factory) has to be furnished to the Customs Authority as following debit of duty against a scrip, an undertaking is also to be furnished to the said officer for payment of any differential duty with interest thereon. This undertaking in case of procurement of services has to be filed within thirty days of the debit to the said officer undertaking to pay differential tax with interest if any. The duty or tax even though paid .....

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ated in Paragraph 3.06(i) of the Foreign Trade Policy 2015-2020. MEIS benefit could also be claimed by supporting manufacturers instead of the merchant exporter as long as a disclaimer is available from the latter who has realized export proceeds. Exporters who desire to avail the benefit of this scheme would be required to make an online application through http://dgft.gov.in in form ANF 3A with relevant Shipping bills and e-BRC to be linked thereto with such application being made for each por .....

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g country is available, can either be uploaded using digital signature or the original copy filed with the Regulating Authority. Eligibility under SEIS Under this scheme, the service provider located in India should either provide a service notified to another country or to a consumer in another country. The service provider desiring to claim the benefit of this scrip should also have minimum net free foreign exchange earnings (i.e. gross earnings of foreign exchange minus total expenses on serv .....

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ted and social services, tourism and travel related services, recreational, cultural and sporting services, and transport services. Individual categories of services have been specified under these headings. The list is similar to the one in Appendix 41 to the Foreign Trade Policy 2009-2014. The rates vary from 3-5% of the net foreign exchange earnings of the service exporter from notified services. The scheme would not cover services provided to SEZ/STPI/EHTP/EOU/BTP or services provided by the .....

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ffice/ Registered Office/Head Office / Branch Office address endorsed on IEC for submitting application/applications under SEIS. This option needs to be exercised at the beginning of financial year. A certificate from either a Chartered Accountant/Cost Accountant or Company Secretary would also be required to be submitted along with form ANF 3B in the prescribed format. The said scrip has to be registered with Customs Authority at the port of registration which would be indicated on the said scr .....

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ted by the said Customs Authority within thirty days to the said Officer i.e. central excise officer, along with an undertaking addressed to the said Officer, to pay any differential tax with applicable interest. The benefit of either cenvat credit or drawback could be claimed on the service tax so debited against the scrip. Readers may note that the SEIS scrip could even be used to pay off excise duties and/or customs duties indicated earlier, on domestic procurements or imports of goods includ .....

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ip. The scrips i.e. under MEIS and SEIS referred to above could also be used to lease capital goods. Duty Credit Scrip can be utilised / debited for payment of Custom Duties in case of EO defaults for Authorizations issued under Chapters 4 and 5 of the Policy i.e. for instance, advance authorization and EPCG schemes with the exception of interest and penalty which would have to be paid separately. Where goods procured from abroad under the scrips are found to be defective post debit of duty agai .....

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es as undertakings have to be furnished to the jurisdictional Central Excise officer i.e. officer having jurisdiction over supplier/service provider s premises to pay off differential duty/tax liability with interest if any. This would be a cumbersome procedure which could have been done away with. Moreover a simple self-certification process for debiting duty against scrip followed by necessary undertakings to be submitted to Customs Authorities and periodical audit by Central Excise Authoritie .....

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ow it will works in practical scenario i..e if I want to procure input against duty credit script how to pay duty? because normally supplier invoice is inclusive of excise duty amount need to pay to the supplier the invoice amount. How to discharge duty liability through script?2.Suppose my duty credit script is for ₹ 10,000/- is I want to utilize this amount how to utilize? i..e for a particular purchase the amount ED is ₹ 750/- and likewise multiple purchases are there. how to util .....

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