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All type of Service Providers (i.e. Companies, Partnership, Proprietorship) providing notified services will be eligible for SEIS if they are providing services as per any of the two specified modes (out of four modes) .
Mode | Title of Mode | Description | Eligible for SEIS |
1 | Cross border trade | Supply of a ‘service’ from India to any other country | Yes |
2 | Consumption abroad | Supply of a ‘service’ from India to service consumer(s) of any other country in India | Yes |
3 | Commercial Presence | Supply of a ‘service’ from India through commercial presence in any other country | No |
4 | Presence of natural persons | Supply of a ‘service’ from India through the presence of natural persons in any other country | No |
The first step in calculation of scheme benefits is to arrive at the figure of Net Foreign Exchange earned during the particular financial year as per following formula:
Net Foreign Exchange = 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 – Once Net Foreign Exchange earnings are calculated, the next step is to find out the applicable rate as per the services being exported.
In the starting of the scheme, DGFT notified the rates between 3 to 5% of the Net Foreign Exchange earnings. However, later on, these rates were increased by 2% and the applicable rate of benefit under SEIS is in the range of 5 to 7% with effective from 1st November’2017 and applicable till 31st March’2018.
Services | Reward Rates (from 1.4.15to 31.10.17) | Reward Rates (from 1.1.17 to31.3.18) |
Professional Services (Legal, Accounting, Tax, Medical etc.) | 5% | 7% |
Research & Development Services | 5% | 7% |
Rental/Leasing services without operators | 5% | 7% |
Other Business Services | 3% | 5% |
Audiovisual services | 5% | 7% |
Construction & related Engineering Services | 5% | 7% |
Educational Services | 5% | 7% |
Environmental Services | 5% | 7% |
Services | Reward Rates (from 1.4.15 to 31.10.17) | Reward Rates (from 1.1.17 to 31.3.18) |
Health-Related and Social Services | 5% | 7% |
Tourism and Travel Related Services | 3-5% | 5-7% |
Recreational, Cultural and Sporting Services (other than audio visual services) | 5% | 7% |
Maritime Transport Services | 5% | 7% |
Air Transport Services | 5% | 7% |
Road Transport Services | 5% | 7% |
Services auxiliary to all modes of Transport | 5% | 7% |
Other important points:
Period of delay in filing the claim | Late cut % |
Application received after the expiry of last date but within six months from the last date | 2% |
Application received after six months from the prescribed date of submission but not later than one year from the prescribed date | 5% |
Application received after 12 months from the prescribed date of submission but not later than 2 years from the prescribed date | 10% |
(1) Foreign exchange remittances other than those earned for rendering of notified services would not be counted for entitlement. Thus, other sources of foreign exchange earnings such as equity or debt participation, donations, receipts of repayment of loans etc. and any other inflow of foreign exchange, unrelated to rendering of service, would be ineligible.
(2) Following shall not be taken into account for calculation of entitlement under the scheme
(a) Foreign Exchange remittances:
(i) Raising of all types of foreign currency Loans;
(ii) Export precedes realization of clients;
(iii) Issuance of Foreign Equity through ADRs / GDRs or other similar instruments;
(iv) Issuance of foreign currency Bonds;
(v) Sale of securities and other financial instruments;
(vi) Other receivables not connected with services rendered by financial institutions; and
(b) Payments for services received from EEFC Account;
(c) Foreign exchange turnover by Healthcare Institutions like equity participation, donations etc.
(d) Foreign exchange turnover by Educational Institutions like equity participation, donations etc.
(e) Export turnover relating to services of units operating under SEZ / EOU / EHTP / STPI / BTP Schemes or supplies of services made to such units;
(f) Clubbing of turnover of services rendered by SEZ / EOU /EHTP / STPI / BTP units with turnover of DTA Service Providers;
(g) Exports of Goods.
(h) Foreign Exchange earnings for services provided by Airlines, Shipping lines service providers plying from any foreign country X to any foreign country Y routes not touching India at all.
(i) Service providers in Telecom Sector.
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