Benefits under Served From India Scheme of the Foreign Trade Policy (FTP)

 Benefits under Served From India Scheme of the Foreign Trade Policy (FTP)



Introduction-  This is the scheme, under foreign trade policy of india , under which certain service providers earning foreign exchange  are eligible for duty scrip credit which can be utilised for payment of duty upon import of certain articles.

Objective of the Served from the India Scheme- Objective of SFIS is to accelerate growth in export of services.

Who is eligible for the benefits of served from india Scheme- Served From India Scheme is applicable for Indian service providers rendering services  listed in Appendix 41 of Handbook of  Procedures 2009-14  (w.e.f. 01.01.2011) and having free foreign exchange earning of at least Rs. 10 lac in the current financial year. For Individual Indian Service Providers, minimum free foreign exchange earnings have to be  Rs 5 lac for eligibility of benefits under this scheme. For services rendered prior to 01.01.2011, Appendix 10 of HBPv1 would be applicable.

Amendment made in SFIS scheme affecting Aviation Industy-  As per Notification 17/(RE-2010)/2009-2014, dated 18th January, 2011, the phrase ‘Appendix 10 of HBPv1’  in the foreign trade policy (2009-14) has been replaced by the phrase ‘Appendix 41 of HBPv1’ stating that Air Transport Services, Passenger Transportation and Freight Transportation are not eligible for SFIS benefits w.e.f. 1st January,.2011.  Earlier to this notification , foreign exchange earned by airlines for services provided for air transportation services plying from country X to country Y, not touching india at all were ineligible for SFIS benefits. But after the notification 17/(RE-2010)/2009-2014, dated 18th January, 2011 has come into effect , airlines providing services of air transportation plying from county X to india or country Y but touching india are also  not eligible for SFIS benefits.



Ineligible services and Service Providers- Services and Service Providers as listed in Para 3 .6.1 of HBPv1 of foreign trade policy 2012-13 shall not be entitled for benefits under the SFIS scheme.

Entitlement-  Service Providers of services listed in Appendix 41 of HBPv1 would alone be eligible. Such eligible service providers will be entitled to Duty Credit Scrip equivalent to 10% of free foreign exchange earned during current financial year . This was till the time below amendment is annouced by Mr. Anand Sharma, minister of Commerce, Industry and Texttiles on 18th April, 2013. After Amendment eligibility position will be as follows.

 Amendment- 
Service providers are entitled to duty credit scrips under Served from India Scheme at the rate of 10% of free foreign exchange earned during a financial year. The entitlement shall now be calculated on the basis of net free foreign exchange earned (i.e., after deducting foreign exchange spent from the total foreign exchange earned during the financial year).

Utilisation of the duty credit scrip under SFIS-
1.     Duty Credit Scrip may be used for import of any capital goods including spares, office equipment and professional equipment, office furniture and consumables. Imports shall relate to any service sector business of applicant. Accordingly, you should be entitled to avail of the benefit of the Duty Scrip under the SFIS scheme for import of office equipment provided such equipment is being used for only any service sector business of the applicant.

 Amendment-  After the amendment is announced on 18th April 2013, Service exporters who are also engaged in manufacturing activity are permitted to use SFIS duty credit scrip for importing/domestically procuring capital goods as defined in para 9.12 of FTP including spares related to manufacturing sector business of the service provider.

2.     Utilization of Duty Credit Scrip shall be permitted for payment of duty in case of import of only those vehicles, which are in the nature of professional equipment to the service provider. i.e. imported vehicles have to be used only for the business of the applicant.
Amendment-  After the amendment is announced on 18th April 2013, Hotels, travel agents, tour operators or tour transport operators and companies owning/operating golf resorts having SFIS scrip can import or domestically procure motor cars, SUVs and all purpose vehicles using SFIS scrips for payment of duties. Such vehicles need to be registered for “tourist purpose” only.

3.     Duty Credit Scrip in case of hotels, clubs having residential facility of minimum 30 rooms, golf resorts and stand-alone restaurants having catering facilities, may also be used for import of consumables including food items and alcoholic beverages.

So by accelerating growth in export of services, indian government is trying to create a powerful and unique served from india brand , instantly recognised and respected world over.
  

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