Incentives for Banking Sectors under Foreign Trade Policy --By CA.HANS RAJ CHUGH
Government of India has introduced "Served from India Scheme" in past year 2007 to facilitate exporter of various type of services and objective was to accelerate growth in export of services and create a powerful and unique 'Served from India' brand, instantly recognized and respected world over. Under this scheme, Service Providers of more than 100 services like Professional Services, banking Services. Computer Related services, Hotels, Restaurants, Educational Services, Research and Development services, Communication Services, Construction and Related Engineering Services, Distribution Service, Environmental related Services, Tourism and Transport related Services, Health Related Social Service, Recreational, Cultural and Sporting Services etc. are entitled for Duty Credit Scrip (i.e. 10% of foreign exchange earned during preceding financial year).
This benefit of Duty Credit Scrip is being granted from Regional Offices of DGFT, spread all over the country. Duty Credit Scrip of nearly thousand Crore is being granted annually, based on previous yearsForeign Exchange earned by service exporters including Banks also. However Vide public Notice no.25(RE2010)/2009-14 dated 18 January 2011,Govt of India, Ministry of Commerce and Industry, Department of commerce (DGFT) has modified the list of the eligible services (Appendix-10) and consequently the services related to banking sectors and some other services has been deleted. Hence,foreign exchange earned by providing the listed services (up to 31.12.2010), by the banking sectors is eligible for the incentives and for that bank may file the application by the end of the financial year i.e. 31.03.2013.Read on to Know more……..
About the Scheme
Objective of the scheme to accelerate the growth of Export of Services from India so as to create a powerful and unique ‘Served from India’ brand instantly recognized and respected world over.
Eligibility
Under this scheme Service Providers (including Banking sector) of services listed in Appendix 10 of HBP v1 (list attached as annexure-1) would be eligible and who have free foreign Exchange earning of at least Rs.10 lakhs in the preceding financial year will be eligible for duty credit scrip.
Entitlement
Eligible service providers will be entitled to 10% of free foreign exchange earned during the preceding financial year up to 31.12.2010.”
Imports allowed
Duty credit scrip may be used for import of capital goods including spares, office equipment and professional equipment, office furniture and consumable; that are otherwise freely importable and or restricted. Imports shall relate to any service sector business of applicant.
Procurement from domestic sources
Duty credit shall be permitted to be utilized for payment of Excise duty in terms of DOR notification issued in this behalf for procurement from domestic sources, in respect of items permitted for imports under SFIS duty credit scrip.
Last date for filling of Application
The last date for filling of application will be 31st March 2013 (for foreign exchange earned during the financial year 2009-2010 by providing the listed services with late cut of 10% of the eligible incentive. You may also file an application for foreign exchange earned during the financial year 2010-11 with applicable late cut.
Annexure-1
Banking and other Financial Services (excluding insurance):
a. Acceptance of deposits and other repayable funds from the public
b. Lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transaction
c. Financial leasing
d. All payment and money transmission services
e. Guarantees and commitments
F. Trading for own account or for account of consumer, whether on an exchange, in an over-the-counter market or otherwise, the following:
- Money market instruments (cheques, bills, certificates of deposits, etc.)
- derivative products including, but not limited to, futures and options
- exchange rate and interest rate instruments, including products such as swaps, forward rate agreements, etc. transferable securities
- Other negotiable instruments and financial assets, including bullion
g. Participation in issue of all kinds of securities, including under writing and placement as agent (whether publicly or privately) and provision of service related to such issues
h. Money binding
i. Asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial depository and trust services
j. Settlement and clearing services for financial assets, including securities, derivative products and other negotiable instruments
k. Advisory and other auxiliary financial services on all the activities listed in article 1B of MTN.TNC/W/50, including credit reference and analysis, investment and portfolio research and advise, on acquisitions and own corporate restructuring and strategy
l. Provision and transfer of financial information and financial data processing and related software by providers of other financial services
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