service export from india scheme (seis)

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

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Page 1: Service Export from India Scheme (SEIS)

Service Export from India Scheme (SEIS)

………. An opportunity for Indirect Tax Saving

Page 2: Service Export from India Scheme (SEIS)

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

Page 3: Service Export from India Scheme (SEIS)

SEIS : An Overview

Objective

Encouragement of service export from

India

Benefit

Duty credit scripts

Page 3 Service Export from India Scheme (SEIS)

Eligibility

Service Provider and

Specified services

Period of Benefit

& Restrictions

Period & Remittances

Computation

Net Foreign Exchange

Page 4: Service Export from India Scheme (SEIS)

� 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

Page 5: Service Export from India Scheme (SEIS)

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 FYFor 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

Service Export from India Scheme (SEIS)Page 5

Page 6: Service Export from India Scheme (SEIS)

� 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.glabour 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

Service Export from India Scheme (SEIS)Page 6

� Earning by Airlines and Shipping line service providers plying from one country to another country routes without touching India at all

Page 7: Service Export from India Scheme (SEIS)

� 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

Service Export from India Scheme (SEIS)Page 7

Page 8: Service Export from India Scheme (SEIS)

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

Page 8 Service Export from India Scheme (SEIS)

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 10000Other 15000 USD.

Page 9: Service Export from India Scheme (SEIS)

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 annualbasis in ANF 3B using digital signature.

Where the application form is to be filed?

Page 9 Service Export from India Scheme (SEIS)

� 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 submittingapplication/applications under SEIS. This option need to be exercised at the beginning of financialyear. 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 theappropriate column. RA will issue the scrip with such port of registration. Such Duty credit scripneeds to be registered at the port of registration of duty credit.

Page 10: Service Export from India Scheme (SEIS)

Frequently Asked Question (FAQ)

� 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 andmultiples thereof.

Further, Once Duty Credit Scrip has been issued, request for splits can be permitted with sameport of registration as appearing on the original Scrip. The above procedure shall be applicableonly 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

Page 10 Service Export from India Scheme (SEIS)

� 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 oldscheme 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 oldscheme shall be applicable on the scripts issued under the old scheme

Page 11: Service Export from India Scheme (SEIS)

Frequently Asked Question (FAQ)

� 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 DoRnotification.

� 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 throughutilization 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 of98% of debited amount, with same port of registration and valid for a period equivalent to balance

Page 11 Service Export from India Scheme (SEIS)

98% of debited amount, with same port of registration and valid for a period equivalent to balanceperiod available on date of import of the defective / unfit goods.

Page 12: Service Export from India Scheme (SEIS)

� 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

Service Export from India Scheme (SEIS)Page 12

Page 13: Service Export from India Scheme (SEIS)

Specified list of services … Annexure 1

SlNo

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

Service Export from India Scheme (SEIS)

Page 14: Service Export from India Scheme (SEIS)

Specified list of services … Annexure 1

SlNo

Nature of Service CPC Code Reward (% 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

Service Export from India Scheme (SEIS)

Page 15: Service Export from India Scheme (SEIS)

Specified list of services … Annexure 1

SlNo

Nature of Service CPC Code Reward (% 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)

6338861-8866

3

Service Export from India Scheme (SEIS)

Page 16: Service Export from India Scheme (SEIS)

Specified list of services … Annexure 1

SlNo

Nature of Service CPC Code Reward (% 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

Service Export from India Scheme (SEIS)

Page 17: Service Export from India Scheme (SEIS)

Specified list of services … Annexure 1

SlNo

Nature of Service CPC Code Reward (% 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

Service Export from India Scheme (SEIS)

Page 18: Service Export from India Scheme (SEIS)

Specified list of services … Annexure 1

SlNo

Nature of Service CPC Code Reward (% 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

Service Export from India Scheme (SEIS)

Page 19: Service Export from India Scheme (SEIS)

Specified list of services … Annexure 1

SlNo

Nature of Service CPC Code Reward (% 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

Service Export from India Scheme (SEIS)

Page 20: Service Export from India Scheme (SEIS)

Specified list of services … Annexure 1

SlNo

Nature of Service CPC Code Reward (% 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

Service Export from India Scheme (SEIS)

Page 21: Service Export from India Scheme (SEIS)

Specified list of services … Annexure 1

SlNo

Nature of Service CPC Code Reward (% 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

Page 21 Service Export from India Scheme (SEIS)

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.

Page 22: Service Export from India Scheme (SEIS)

For Any queries or clarification For 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

[email protected]