Service exporters have suggested a 10% incentive rate for Covid-19 hit sectors such as hospitality, aviation and tourism, under a new scheme to replace the Services Export from India Scheme (SEIS).
The government is working on a new incentive scheme for select sectors wherein the benefits for exports range from 3-10% unlike the SEIS, which provided duty credit scrips to exporters at the rate of 3-5% of the net foreign exchange earned.
In this regard, Sunil H Talati, chairman, Services Export Promotion Council, has said “We are working on sector-wise benefits for 12 champion sectors and will soon submit them to the government.”
Further, as per the council, the higher sops on which it is currently working, will also enable Indian service providers to face competition from the Philippines, Cambodia, East and South African countries as they provide services at a cheaper rate.
The proposal for higher sops comes after the government last September imposed a limit on the total entitlement under the SEIS for shipments made during 2019-20 at Rs 5 crore per exporter.
However, the government last year had released Rs 10,002 crore to clear the pending services export incentive dues. Also, the council had proposed a Duty Remission on Export of Services Scheme to refund taxes to services exporters wherein small and micro exporters would be eligible for a 7% incentive while the large ones would get 4%.