DGFT

SEIS

MEIS

EPCG

Advance Authorisation

TMA

Services Export from India Scheme (SEIS)

Introduction to SEIS :

Services Export from India Scheme replaces the earlier known SFIS i.e. served from India Scheme with radical changes. This scheme got introduced in Foreign Trade Policy for the period 2015-2020.

This scheme is to boost the service exporters located in India. There has been so many schemes for Goods exporters but there service exporters were never pleased before like this.

  • Applicable to Service Providers Located In India.
  • Service Providers must be providing Services Notified in Appendix 3D.
  • To Incentivize Exporters & eliminate administrative Inefficiencies.
  • Incentive- Duty Credit Scrip Ranging from 3% – 7% of Net foreign Exchange (NFE) Earned.
  • Net Foreign Exchange Earned = Gross Earnings of Foreign Exchange – Total Expenses or payment or remittances in Foreign Exchange.
  • Duty Credit Scrips are freely transferable & can also be sold in open market.
  • Duty Credit Scrip (DCS) can be Used for Payment of various Custom Duties.

Eligibility Criteria :

  • Notified Eligible Services
  • Must have an active Importer Exporter Code at the time of rendering such services
  • Rendering of Services to the service consumer of any other Country In India
  • Registration Cum Membership Certificate (RCMC) from Export Promotion Council before Filing an application
  • Minimum NFE – USD 15,000 in preceding Financial year (USD 10,000 for Individual Service Providers and Sole Proprietorship

Scope of Services:

We at TaxMistri Provides End to End services from determining the eligibility of an service exporter to selling the Duty Credit Scrips at best rates in open Market.

Recent Updates on SEIS:

  1. Services Eligibility for the period 01.04.2019 to 31.03.2020 will be determined on the basis of notified list of services in appendix 3X.
  2. Foreign Trade Policy 2015-2020 has been extended to 31.03.2021.
  3. Continuity of SEIS for FY 2020-2021 is yet to be taken by DGFT.
  4. Last date for Filing SEIS for FY 2018-2019 has been extended from 31.03.2020 to 31.12.2020.

Merchandise Export from India Scheme (MEIS)

Introduction to MEIS :

– Merchandise Exports from India Scheme (MEIS) under Foreign Trade Policy of India (FTP 2015-20) replaces the earlier known:

  • Focus Product Scheme (FPS)
  • Focus Market Scheme (FMS)
  • Market Linked Focus Product Scheme (MLFPS)
  • Infrastructure incentive scheme
  • Vishesh Krishi Gramin Upaj Yojna (VKGUY)

This scheme was introduced in Foreign Trade Policy of India 2015-20, as a part of Exports from India Scheme along with one more scheme (The other scheme is SEIS, Service Export from India Scheme).

As per the present FTP, the MEIS scheme does not aim to merely replace these five schemes but also aims to rationalize the incentives and enlarges their scopes by removing various restrictions.

Eligibility Criteria :

  • Exports of notified goods/products with ITC[HS] code, to notified markets as listed in
    Appendix-3B, shall be rewarded under MEIS.
  • Exports of goods must be made to notified Countries.
  • Rate of MEIS depends upon the product exported as well as the country (Group A, Group B or Group C) to which the product is exported.
  • Export must have realized the export realization in Foreign Currency.

Time Limit to file MEIS Application:

The application should be filed within a period of:

    • 12 months from the LEO (Let Export) date or
    • 3 months from the date of – uploading of the EDI shipping bills onto the DGFT server by customs, or printing of shipping bills for non-EDI shipping bills,The application should be filed within a period of: whichever is later.
  • Post above there will be late cut on incentive amount as per paragraph 9.02 of HBP 2015-2020.

Scope of Services:

We at TaxMistri Provides End to End services from determining the eligibility of an Goods Exporter to selling the Duty Credit Scrips at best rates in open Market.

Export Promotion Capital Goods (EPCG)

Introduction to EPCG :

  • This is a Scheme which enables an importer (being an export-oriented business) to import capital goods at zero rates of customs duty. However, the scheme is subject to an export value equivalent to 6 times of duty saved on the importation of such capital goods within 6 years from the date of issuance of the authorization. In simple words, there is a compulsion on the business to bring in foreign currency which is equal to 600 percent of duty saved on such importation measured in domestic currency. This is to be done within six years from availing the Export Promotion Capital Goods scheme,
  • Export Promotion Capital Goods are capital goods used in the production of goods which are exported to other countries. It includes machinery as well as spares. Hence, to qualify as Export Promotion Capital Goods, the commodity manufactured in India must be exported outside India.
  • The capital goods allowed under Export Promotion Capital Goods Scheme shall include spares (including reconditioned/ refurbished), fixtures, jigs, tool, moulds and dies. Further, second-hand capital goods may also be imported without any restriction on age under the EPCG Scheme.

Advance Authorisation

Introduction to Advance Authorisation :

  • An Advance Authorization is issued to allow duty free import of inputs, which are physically incorporated in export product (making normal allowance for wastage).
  • In addition, fuel, oil, energy, catalysts which are consumed / utilized to obtain export product, may also be allowed. DGFT, by means of Public Notice, may exclude any product(s) from purview of Advance Authorization.
  • Duty free import of mandatory spares up to 10% of CIF value of Authorization which are required to be exported / supplied with resultant product are allowed under Advance Authorization.
  • Advance Authorizations are issued for inputs and export items given under SION. These can also be issued on the basis of Ad-hoc norms or self-declared norms as per para 4.7 of HBP v1.

Eligibility Criteria :

Advance Authorization can be issued either to a manufacturer exporter or merchant exporter tied to supporting manufacturer(s) on the basis of following conditions

  • Physical Exports (including Exports to SEZ); and or
  • Intermediate Supplies; and or
  • Authorization holder shall be a “Actual User”
  • Pre Import Condition

Actual User Condition:

  • “Actual user” under Advance Authorisation implies that procured goods have to be used by the authorization holder only, although he may transfer the same for job work. Other implications of Actual user condition are as follows:
  • Raw material imported under Advance Authorisation shall be subject to ‘Actual User’ condition. Actual User condition means, raw material imported under advance authorisation shall not be transferable even after completion of export obligation.
  • Authorisation holder will have option to dispose of product manufactured out of duty free input once export obligation is completed.
  • Goods imported against such Advance Authorisation shall be utilized only in the manufacture of dutiable goods whether within the same factory or outside (by a supporting manufacturer like Job worker).
  • Waste / Scrap arising out of manufacturing process, as allowed, can be disposed off on payment of applicable duty even before fulfilment of export obligation.
  • If any Authorisation holder not satisfying conditions of Actual user( i.e. sale raw material to other person without processing) even satisfying the condition of export obligation, raw material which is imported under Advance Authorisation shall required to pay all custom duties with interest on import of such goods.

Pre-Import Condition:

  • Under the advance authorization scheme a person can import the inputs first and make the export of resultant products later on is called Pre-import condition. A person has to first import inputs & make resultant product for physical exports by a person who intend to claim the exemption from IGST also.
  • If any person chooses to make the physical exports of the goods first and then import the inputs as replenishment then he can do so but in the situation exemption from IGST will not be available to him, but he can take the benefit of BCD.

Transport and Marketing Assistance (TMA)

Introduction to TMA :

  • TMA is launched for Specified Agriculture products (Agriculture Products specified in HSN Chapter 1 to 24 except specified in Annexure 1)
  • This Scheme is included in Foreign Trade Policy 2015-2020 in March 2019.
  • This scheme aims to provide assistance for the international component of freight and marketing of agricultural produce so as to make indian agriculture product export competitive.
  • The assistance, at notified rates, will be available for export of eligible agriculture products to the permissible countries, as specified from time to time.
  • This scheme currently is available for Exports made from 01.04.2019 to 31.03.2020.
  • List of export countries/destinations for which this benefit will be entitled in specified in Annexure B.
  • Rate of Assistance under TMA is specified in Annexure 3.
  • Procedure for availing TMA is specified in Public Notice 82/2015-2020 dated 29th Mar’2019.