Service Exports from India Scheme

Overview

The Service Exports from India Scheme is a government initiative that encourages and rewards the export of services from India. SEIS came into effect as part of the Foreign Trade Policy 2015–20, providing financial assistance to service providers in foreign exchange, and hopefully benefiting the country’s service export sector.

In this blog, we explain what SEIS is, who is eligible, how it works, and what benefits are offered.

Introduction

For decades, India has played a huge role in the export of services globally, particularly in the areas of Information Technology, consulting, finance and tourism. To support and incentivize this developing service sector, the Directorate General of Foreign Trade (DGFT), implemented the Service Exports from India Scheme (SEIS) as part of the Foreign Trade Policy 2015-2020.

SEIS was designed to encourage service providers to increase exports by offering duty credit scrips that could be used for payment of various duties or sold in the open market. Though the scheme underwent pauses and review due to COVID-19 and changes in trade policies, it remains relevant for exporters who claimed benefits for past years.

What is the Service Exports from India Scheme (SEIS)?

SEIS is a reward scheme under India’s Foreign Trade Policy (FTP) to promote the export of notified services from India. The main objective is to offset infrastructural inefficiencies and enhance the global competitiveness of Indian service providers.

Instead of a direct cash incentive, exporters receive duty credit scrips, which –

Can be used to pay the customs duties, excise duties, or service tax liabilities
They are freely transferable, meaning they can be sold to other businesses

The scheme primarily benefits businesses that earn foreign currency by supplying services to foreign clients.

Who is Eligible Under SEIS?

To qualify for SEIS benefits, the following conditions must be met –

Nature of Service

The exporter must provide services listed in Appendix 3D of the FTP. These include –

IT and ITeS (Information Technology Enabled Services)
Consultancy services
Research and development
Legal and accounting services
Tourism and travel-related services
Educational services
Medical and wellness services

Location of Service Provider

The service provider must be located in India and should have a valid Import Export Code (IEC).

Earning in Convertible Foreign Exchange

Only services exported in convertible foreign exchange (like USD, EUR, GBP) qualify.

Minimum Net Foreign Exchange (NFE) Earnings

To claim SEIS, the service provider must meet the minimum net foreign exchange earning threshold –

Individuals/sole proprietors – US$10,000
Other service providers (firms, companies) – US$15,000

Active IEC and GST Registration

You must have an active Import Export Code (IEC), and usually, GST registration is also expected.

Ineligible Categories

Not all service providers qualify. Some exclusions include –

Export of goods
Services provided in Indian rupees (except when permitted by RBI)
Services rendered from outside India
Departments of government or PSUs

Always refer to the latest DGFT notifications to confirm updated eligibility and exclusions.

How Much Incentive is Offered?

Under SEIS, eligible exporters of services will receive duty credit scrips equal to 3% to 5% of their net foreign exchange earnings for a financial year.

The rate depends on the type of service exported and is noted in Appendix 3D of the FTP.

How to Apply for SEIS Benefits

Step 1. Prepare the Required Documents

IEC certificate
Foreign Inward Remittance Certificates (FIRC)
CA-certified statement of export earnings
GST returns
Proof of service exports (agreements/invoices)
Digital Signature Certificate (DSC)

Step 2. Log in to the DGFT Portal

You have to visit https://www.dgft.gov.in and register using your IEC and link your business details.

Step 3. File ANF 3B Form Online

Under the “Services” tab, select the SEIS application and fill in the ANF 3B form. Upload all supporting documents.

Step 4. Pay the Application Fee

The fees can be submitted as per the DGFT fee schedule. The fees can be paid online.

Step 5. Track Status and Receive Duty Credit Scrip

When processing is complete, the Duty Credit Scrip will be available digitally. It can now either be used or transferred to another person.

How to Use the Duty Credit Scrip

Duty credit scrips issued under SEIS, that can be –

Used to pay customs duties on imports
Sold in the market (since they are transferable)
Used to pay Basic Customs Duty (BCD), Anti-dumping duty, or Safeguard duty

These scrips are valid for 24 months from the date of issue and must be carefully tracked to avoid expiry.

Status of SEIS After 2020

With the Foreign Trade Policy 2015–20 officially coming to an end, uncertainties arose regarding the continuation of SEIS.

As of now –

DGFT allowed SEIS claims for FY 2019–20 and FY 2020–21, but capped incentives at Rs 5 crore per IEC for FY 2019–20
SEIS benefits were not extended to FY 2021–22 onwards under the draft Foreign Trade Policy 2023
A new scheme for the service exporters is expected under revised export incentives, but it is not confirmed yet

Exporters are advised to stay updated through DGFT circulars and trade notices.

Common Mistakes to Avoid

Missing the annual application deadline (usually 31st December of the next financial year)
Submitting incomplete or mismatched documentation
Failing to meet the minimum foreign exchange threshold
Using the script after its expiry
Ignoring updates in service codes and eligibility lists

Conclusion

The Service Exports from India Scheme (SEIS) was a great promotion for service providers wishing to globalise their business. The future under the new Foreign Trade Policy is unknown, but it will still have significance in relation to previous eligible years.

If your business exports services in convertible foreign currency and meets the eligibility norms, then there is still an opportunity for similar benefits under the SEIS Scheme for FY 2019–20 and 2020–21. Making timely applications, fulfilling the documentation requirements, and complying with DGFT’s guidelines can help you reap this reward.