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Commerce Ministry weighing proposal to revamp scheme for services exports

  • 20 May 2021
  • Garima
  • 126

The commerce ministry is weighing a proposal to overhaul a key scheme for services exporters to make it more broad-based and foolproof so that a wider pool of businesses, especially Covid-hit MSMEs, get the succour.

The revamped Service Exports From India Scheme (SEIS) may be part of the new five-year Foreign Trade Policy (FTP), which will be effective from October 2021, sources told FE.

However, given the resource crunch faced by the government in the wake of the pandemic and the growing requirement of healthcare spending, much depends on the finance ministry’s approval to any such scheme, one of the sources said. 

The commerce ministry has also held discussions with exporters on the feasibility of bringing in a tax refund scheme for services exporters in the future, along the lines of the Remission of Duties and Taxes on Exported Products (RoDTEP) announced for merchandise exporters, another source said.  The resource-starved government may also reduce benefits for consultancy and certain other professional services that it thinks to corner a sizeable chunk of incentives. Moreover, a section of the government believes that since few players are grabbing most of the SEIS incentives, the scheme should be altered in such a fashion that it helps a large number of small businesses as well.

Factoring in the government’s resource woes, the state-backed Services Export Promotion Council (SEPC) has proposed that the Centre limit the SEIS benefits to a maximum of 5 crores per exporter for various services sectors. However, sectors, including travel and tourism, healthcare, education, and aviation, which have been worst hit by the pandemic should be exempted from this ceiling and allowed the full entitlement, according to the SEPC. This will take care of the interest of thousands of MSMEs in the sector, the SEPC feels.

Source- https://www.financialexpress.com/economy/wider-coverage-commerce-ministry-weighing-proposal-to-revamp-scheme-for-services-exports/2254487/