Under the Foreign Trade Policy 2015-2020, some benefits were announced in the form of Duty Credit Scrips by the Ministry of Commerce for the Services Sector under Services Export from India Scheme (SEIS), which has been increased from 5 per cent to 7 per cent recently. Industry stalwarts explain how inbound agents should go about availing benefits from this.
What is SEIS?
“The government gave exporters status to the tourism industry and tourism organisations which were earning foreign exchange. This led to tour operators and others earning Forex to import duty free under Export Promotion Capital Goods (EPCG), after which they gave us SFIS license. This was 10 per cent of the Forex earned during the previous year. After that it was converted into SEIS licenses from April 2015. Under SEIS, the incentive was brought down to 5 per cent but the Government allowed tour operators and hoteliers to sell their licenses in the open market. This five per cent incentive came in at a time when the tourism industry was really facing problems. Because of this, the companies are showing some profits. From Nov 1, 2017, this incentive has been increased to seven per cent for tour operators and five per cent for the hotels. Since we can sell it in the open market, it’s a good incentive to the tour operators.” Sarab Jit Singh India Travel Award Winner and Managing Director, Travelite India and KTC India
Why it is beneficial?
“SEIS is a good initiative by the government, where they have acknowledged that tourism is a prime body, which earns a valuable foreign exchange. To encourage the tour operators bringing in foreign exchange, they have given this benefit. It was earlier five per cent, which they used to give in the form of duty credit scrips, which in turn could be sold in the market to the importers. This way the tour operators could make some money and make some profit. Now this benefit has been increased. From 5 per cent, it has increased to 7 per cent, which is a good initiative by the government and this will be applicable from November 1, 2017, and is valid till March 31, 2018. After this it will be reviewed again for the next year. We have asked our members to avail this benefit in large numbers and have even referred consultants who can help them with the same.” Pronab Sarkar President IATO
How it can be availed?
“The benefits under the SEIS scheme has been available by tour operators for some years now. IATO has circulated this a number of times. In May last year, we had called experts to give details of everything. There is a lot of paperwork for getting these benefits and smaller agents do not want to get into this. This is one of the reasons why many operators are not taking these benefits. While it is a lengthy process, it is worth the effort because the duty drawback which was five per cent, has been increased to seven per cent from Nov 1, 2017, on the net foreign exchange earned. We are also trying to tell our members who are earning foreign exchange that they must go and avail this benefit. There are people who are doing this for operators and charging money for the same, and they can help them in getting the required documents. We have asked our members to get in touch with them and negotiate the rates to smoothly apply for the benefits.” Rajiv Mehra Vice President IATO