Export promotion scheme 2

2. DUTY CREDIT SCRIPS
• Duty credit scrip is the most popular export promotion incentive provided by the
government to exporters. The purpose of the scheme is to promote exports by giving
import tariff concessions to exporters (for helping them to import machineries and
components they use for producing exportable goods). Under the scrip, exporters can
get import tariff (customs duty) concessions to a specific percentage of their export
value.
• A DCS provides tax incentives on exports, which can be used by exporters to set off
their import duties. It is issued under the Merchandise Exports from India Scheme
(MEIS), Service Exports from India Scheme (SEIS), and the Export Capital Goods
Scheme
• The scheme is implemented and administrated by the Government’s Ministry of
Commerce and Industry, in association with the Directorate General of Foreign Trade
(DGFT).

3. • A duty credit scrip is a certificate (or scrip) that can be used by its holder for the
payment of import tariff (customs duties).
• Imagine a situation where an exporter has received an export order and needs to
import raw materials to begin the production process. Naturally, the exporter will
need funds to execute both the production and despatch. At this time, the last
thing the exporter would want is to pay import duty on the purchase of raw
materials, eating into their working capital.
• Having DCS takes that burden off the exporter’s shoulders. For instance, if the
exporter has a DCS balance of Rs. 1 lakh and Rs. 1.5 lakh is customs duty
liability for import of raw materials, they will need to pay only the difference (Rs.
50,000). In other words, they can utilize the Rs. 1 lakh in DCS towards the
outstanding customs duty liability.

4. 3. SERVED FROM INDIA SCHEME (SFIS)
• This scheme accelerates growth in export of services so as to create a powerful unique
‘served from India’ brand, instantly recognized and respected world over.
• All Indian service providers of services who have free foreign exchange earning of at
least Rs. 10 lakhs in preceding financial year/current financial year shall qualify for
Duty Credit Scrip under SFIS.
• For individual Indian Service Providers, minimum free foreign exchange earnings
would be Rs 5 Lakhs. All service providers shall be entitled to Duty Credit Scrip
equivalent to 10% of free foreign exchange earned during current financial year,
Entitlement/goods (imported/procured) against SFIS scrip shall be non transferable
and be subject to Actual User condition.

5. 4. VKGUY SCHEME
VISHESH KRISHI GRAM UDYOG YOJANA
VKGUY promote exports of:
• Agricultural produce and their value added products
• Minor Forest Produce and their value added variants
• Gram Udyog Products
• Forest Based Products
• Other products, as notified from time to time.

6. 5. STATUS HOLDER INCENTIVE SCRIP (SHIS)
• With an objective to promote investment in upgradation of technology of some
specified sectors, Status Holders exporting products of these sectors shall be
entitled to incentive scrip @ 1% of FOB value of exports in the form of duty
credit.
• The status holders incentive scrip shall be with Actual User Condition and shall be
used for imports of capital goods related to the sector.

7. 6. AGRI-INFRASTRUCTURE SCRIP
• For exports made during a particular year, all Status Holders exporting products
covered under ITC HS chapters 1 to 24, shall be incentivized with duty credit scrip
equal to 10% of FOB value of agricultural exports provided that the total benefits
for all status holders put together does not exceed Rs 100 Cr (i.e. Rs 50 Cr for
each half year).

8. 7. FOCUS MARKET SCHEME (FMS)
• This scheme offset high freight cost and other externalities to select international
markets with a view to enhance India’s export competitiveness in these countries.
• Exporters of all products to notified countries shall be entitled for Duty Credit
Scrip equivalent to 3% of FOB value of exports (in free foreign exchange) for
exports made from 27.08.2009 onwards

9. 8. FOCUS PRODUCT SCHEME (FPS)
• It incentivise export of such products which have high export
intensity/employment potential, so as to offset infrastructure inefficiencies and
other associated costs involved in marketing of these products.
• Exports of notified products to all countries shall be entitled for Duty Credit Scrip
equivalent to 2% of FOB value of exports. However, Special Focus Product/Sector,
covered under Table 2 and 5 of Appendix 37D, shall be granted Duty Credit Scrip
equivalent to 5% of FOB value of exports.
• Further, Focus Products/sectors that are notified under Table 7 of Appendix 37D
shall be granted Additional Duty Credit Scrip equivalent to 2% of FOB value of
export

10. 9. MARKET LINKED FOCUS PRODUCT SCHEME
(MLFPS)
• Export of Products/Sectors of high export intensity/employment potential would
be incentivized at 2% of FOB value of exports under FPS when exported to the
linked markets, which are not covered in the present FMS list.

11. 10. MERCHANDISE EXPORTS FROM INDIA SCHEME
(MEIS)
• Earlier there were 5 different schemes (Focus Product Scheme, Market Linked
Focus Product Scheme, Focus Market Scheme, Agri Infrastructure Incentive Scrip,
VKGUY) for rewarding merchandise exports with different kinds of duty scrips
with varying conditions (sector attached to their use.)
• Now all these schemes have been merged into a single scheme namely
Merchandise Export from India Scheme(MEIS) and there would be no
conditionality attached to the scrips issued under the scheme.
• Rewards for export of notified goods to notified markets under MEIS shall be
payable as percentage of realized FOB value (in free foreign exchange)

12. 11. SERVICE EXPORTS FROM INDIA SCHEME
• Served from India Scheme (SFIS) has been replaced with Service Exports from
India Scheme (SEIS).
• SEIS shall apply to ‘Service Providers located in India’ instead of ‘Indian Service
Providers’. Thus SEIS provides for rewards to all Service Providers of notified
services, who are providing services from India, regardless of the constitution or
profile of the service provider.
• The rate of reward under SEIS would be based on net foreign exchange earned.