Foreign Trade Policy
Foreign Trade Policy 2015-20 Foreign Trade Policy Statement The Foreign Trade Policy Statement explains the vision, goals and objectives underpinning the Foreign Trade Policy for the period 2015-2020. It describes the market and product strategy envisaged and the measures required not just for export promotion but also for the enhancement of the entire trade ecosystem. It is the first comprehensive statement on the government priorities in the Foreign Trade Sector. For improving foreign trade performance, it is necessary to develop a broader framework that provide the scope for coordinating with a number of administrative ministries. Through the FTP statement the overall thinking on external sector has been articulated, first it spells out the government strategy for addressing some of the structural and institutional issues which are relevant for improving the performance of Foreign Trade Sector. Secondly, it states the ways in which the government would make trade and economic integration agreements with trade partners and would work better for Indian enterprises. Foreign Trade Policy has taken ‘whole of government’s approach’. Through FTP a major ‘path breaking’ initiative that the department has taken is to mainstream States, Union Territories and various departments of Government of India in the process of international trade. The FTP introduces two new schemes, namely “Merchandise Exports from India Scheme (MEIS)” for export of specified goods to specified markets and “Service Exports from India Scheme (SEIS)” for increasing exports of notified services.
Services Exports from India Scheme (SEIS)
Services Exports from India Scheme is an incentive scheme for eligible service exports and it was introduced in the Foreign Trade Policy (2015-20) replacing the Served from India Scheme (SFIS). SEIS offers reward @ 3 per cent or 5 per cent of net foreign exchange earned. Only Mode 1 and Mode 2 services are eligible. This scheme covers ‘Service Providers located in India’ instead of ‘Indian Service Providers’, which was the case in the earlier policy. Under the new scheme, the incentive scrips issued are transferable.
Services covered under SEIS are as follows:
- Legal, Accounting, Architectural, Engineering, Educational, Hospital services at 5 per cent
- Hotels and restaurants, Travel agencies and tour operators, other business services at 3 per cent.
Supply of service from India through a commercial presence ie. Commercial presence in any other country or presence of natural person in any other country shall not be eligible for reward under this scheme. So, the service should happen between the Indian entity and the foreign customer without involvement by any other person.
To be eligible for the scheme, the service provider shall have a minimum net free foreign exchange earnings of $ 15,000 in the preceeding year and $10,000 in case of sole proprietors and individuals. An application in Form ANF-3B shall be made for issue of duty credit scrips. The applications for obtaining duty credit scrips under SEIS shall be filed within a period of 12 months from the end of relevant financial year.
Foreign exchange earned other than on rendering the notified services would not be covered for evaluating the eligibility or the issue of scrips.
Net foreign exchange earnings for the SEIS scheme is calculated as:
Net Foreign Exchange = Gross Earnings of Foreign Exchange – Total Expenses or payment or remittances of Foreign Exchange.
In case of EDI enabled scrips, the applicant shall be able to choose any port as the port of registration. Otherwise, telegraphic release advise needs to be obtained.The exporter shall have an active Import Export Code (IE Code) for obtaining filing the application.
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