How to utilize Merchandise Export India Scheme (MEIS) and Service Export India Scheme (SEIS) Scrips. Duty credit scrip is the most popular export promotion scheme introduced by the Ministry of Commerce in Foreign Trade Policy. The purpose of the scheme is to promote the Indian Export. In the current Foreign Trade Policy 2015-20 there are some schemes for which exporter can apply for the duty credit scrip is Merchandise Export India Scheme (MEIS), Service Export India Scheme (SEIS), Rebate of State and Central Taxes and Levies (RoSCTL) etc. The Duty credit scrip value will be certain fixed amount based on Tarriff code, Service type etc. They are issued to exporters by the Director General of Foreign Trade (DGFT).
A duty credit scrip is a certificate that can be used by its holder for the payment of import tariff customs duties. in other words, it is a pass that allows the holder to import commodities by not paying a specified amount in import duties. Majorly Duty Credit Scrip will be utilized for payment of Basic Customs Duty. And these scrips are freely transferable. The scrip has to be verified and registered in the particular Customs Port as mentioned in the scrip.
How to Utilize The Duty Credit Scrip?
Exporter Can utilize the scrip in two manners.
1. Used for his own to pay the Basic Customs Duty of imported goods.
In this, exporter has to verify and register the scrip in the particular port which is mentioned in the scrip. Then he can utilize the scrip in any ports in India to pay the customs duty. At the time of clearance of imported goods scrip amount will be adjusted to the duty amount. Customs authority will debit the scrip amount. If the scrip value is more than the duty payable, then balance amount can be utilized in future. Duty Credit Scrips have validity of 24 months. These can be utilized for any number of import consignments within the validity period and up to the scrip value. Income to be booked in exporters account.
2. Exporter Can sell the Duty Credit Scrips in Open Market.
As explained earlier, Duty Credit Scrips are freely transferable. If exporter doesn’t have any imports or he don’t wish to utilize the scrip by own, he can sell the scrip in open market. There are many buyers (companies and agents) in the market who are purchasing the Duty Credit Scrips at discounted price. The discount may be varied depending on market condition.
Procedures involved in sale and transfer of Duty Credit Scrips.
Scrip Holder has to follow some procedures to sale and transfer of Duty Credit Scrips. Those are
1. To be verified and register the scrip in the particular port which is mentioned in the scrip. This .can be done by buyer also by getting authorization letter from scrip holder.
2. Commercial invoice to be raised to the buyer. GST is 0% for the sale of Duty Credit Scrip.
3. Income to be booked for this transaction in sellers account.
4. Transfer letter to be provided from Scrip holder to buyer which is authorized by the banker of scrip holder.
5. Scrip has to be transferred from Seller IEC to buyer IEC by using the digital signature in DGFT portal.
6. Buyer can utilize the Duty Credit Scrip after transfer in DGFT portal only.
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Please watch: "Services related to Indirect Taxes, Digital Signature, Export Incentives, MSME, IEC "
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