Export from Indian Scheme

There shall be following two schemes for Export respectively:

1. For Export of Merchandise – Merchandise Exports from India Scheme (MEIS).

2. For Export of Services – Service Exports from India Scheme (SEIS).

Nature of Reward

  • Duty Credit Scrips shall be granted as reward
  • Scrips can be freely transferable
  • Scrips can be used for payment of basic custom duty
  • Basic Custom Duty Paid in cash or through debit under Duty Credit Scrip can be taken back as Duty Drawback as per DoR Rules, if inputs so imported are used for exports.

Note : It cannot be used for CGST, SGST or IGST Payment.

Export, Blue Cargo Container Hoisted with Hook on White Background

About Duty Credit Scrips

Duty Credit Scrips (DCS) is an export promotion benefit offered by the Government of India under the Foreign Trade Policy (FTP) 2015-20. As with other export benefits, the aim is to incentivize exporters so that they boost the inflow of foreign exchange to India.

About MEIS Scheme

These scheme were

  • Focus Product Scheme (FPS)
  • Focus Market Scheme (FMS)
  • Market Linked Focus Products Scrips (MLFPS)
  • Vishesh Krishi and Gram Udyog Yojna (VKGUY)
  • Agriculture Infrastructure Incentive Scrips and
  • Incremental Export Incentive Scheme

MEIS incentives are available at 2%, 3%, 5% and 7% of the FOB value of Export. Exporter were initially required to submit landing certificate as a proof of landing of consignment in the destination country. These condition is removed vide public notice 6-2015-2020 dated 4th May 2016

Duty Credit Scrip is Valid for 24 Month after expiry of period revalidation is possible only if in the custody of Custom Authorities.

Objective of the MEIS Scheme

The objective is to offset infrastructural inefficiencies and associated cost involved in export of goods which are produce in India.

Note: Goods falling in the category of handicraft items using e – commerce platform having FOB value up to Rs.25, 000/- per consignment shall be eligible for the benefit under MEIS.

Note: Unit Located in SEZs have also been made eligible for MEIS benefits.

Filling of Application

  • Application to be filled online in the format of ANF-3A using digital signature
  • Maximum 50 shipping bills can be filed
  • No manual Feeding is allowed for EDI shipments

Determination of Jurisdictional officer of DGFT

Applicant has the option to choose Jurisdictional RA for submitting application. Option need to be exercise at the beginning of FY. Once option is exercised, no change would be allowed for that FY.

Port of Registration under MEIS

Scrip to be issued with a single port of registration which shall be the port of export. Duty Credit scrip needs to be registered at the port of export prior to usage of duty credit.

Note: Declaration of intent to claim rewards on the shipping bill is mandatory for eligibility.

Last date of filling of application for Duty Credit Scrips

Application shall be filled within a period of:-

-12 month from the export order date or

-3 month from the date of uploading shipping bill by DGFT server or Release of Shipping Bills for Non EDI Shipping Bills whichever is later.

About SEIS Scheme

Service Export from India scheme is an incentive scheme for eligible service exports. It offer rewards at 5% or 7% of Net Foreign exchange earned. This service covered service provider located in India instead of Indian service provider. Under this incentive Scrips is also transferable.

Scrips can be used for payment if duty in case of import of capital goods under lease financing.

Objective of the SEIS Scheme

The objective is to offset infrastructural inefficiencies and associated cost involved and to provide exporter a level of playing field.

Note: Service Provider should have minimum foreign exchange earning for sole proprietor US$ 10, 000/- and for other US$ 15, 000/-.

Filling of Application

  • Application to be filled with in 12 month from the end of Financial Year.
  • Application to be filled online in the format of ANF-3B using digital signature

GST on sale of Duty Credit Scrips (‘DCS’)

DCS is classified as a good under the provisions of the Goods and Services Tax (‘GST’) law. In the absence of any specific exemption, the sale of DCS earlier attracted GST.

Vide Notification No. 35/2017-Central Tax (Rate) dated 13 October 2017, the CBIC exempted the sale of DCS from the purview of GST. Hence, sale of Duty Credit Scrips under GST is an exempt transaction.

The author can be however contacted for further clarification at 9654182791 or via mail at caajay92@gmail.com

(The author is the founder of solutiontax.in an platform for filing income tax returns, company incorporation, accounting/bookkeeping, audits related compliances etc.)

DISCLAIMER:- This Blog is for the purposes of information / knowledge and shall not be treated as solicitation in any manner or of for any other purposes whatsoever.

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