Export Promotion and Incentives for Services
SEIS is gone and nothing replaced it scheme for scheme. Here's what a services exporter can still use, and what the bank handles.
Services exporters used to have their own reward scheme: SEIS, the Service Exports from India Scheme of FTP 2015-20, which rewarded service exports with duty credit scrips. Foreign Trade Policy 2023 has no SEIS and no services-specific reward scrip in its place. Older study material and recalled questions still describe it, so know that it is history.
What remains is quieter but real: zero-rating under GST, access to general FTP schemes that are open to service providers, and a simpler FEMA regime for declaring and realising service exports. A bank officer handling a software exporter's inward remittances meets all three.
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What a Services Exporter Can Use Now
GST zero-rating
What it gives
Export of services is a zero-rated supply: the exporter can supply without paying IGST under a bond or Letter of Undertaking and claim refund of unused input tax credit
Source
IGST Act, s.16
Status holder recognition
What it gives
Exporters of goods, services and technology holding an IEC can be recognised as One to Five Star Export Houses on export performance
Source
FTP 2023, para 1.25(b)
EPCG
What it gives
Service providers can import capital goods at zero duty against an export obligation; royalty and R&D receipts in foreign exchange count toward it
Source
FTP 2023, paras 5.02(a), 5.04(i)
Districts as Export Hubs
What it gives
District export action plans cover services as well as products
Source
FTP 2023, chapter 3
EOU and STP units
What it gives
Software and services units can operate as Export Oriented Units or Software Technology Park units
Source
FTP 2023, chapter 6
| Measure | What it gives | Source |
|---|---|---|
| GST zero-rating | Export of services is a zero-rated supply: the exporter can supply without paying IGST under a bond or Letter of Undertaking and claim refund of unused input tax credit | IGST Act, s.16 |
| Status holder recognition | Exporters of goods, services and technology holding an IEC can be recognised as One to Five Star Export Houses on export performance | FTP 2023, para 1.25(b) |
| EPCG | Service providers can import capital goods at zero duty against an export obligation; royalty and R&D receipts in foreign exchange count toward it | FTP 2023, paras 5.02(a), 5.04(i) |
| Districts as Export Hubs | District export action plans cover services as well as products | FTP 2023, chapter 3 |
| EOU and STP units | Software and services units can operate as Export Oriented Units or Software Technology Park units | FTP 2023, chapter 6 |
When Is It an Export of Services?
GST decides the tax treatment using five conditions in section 2(6) of the IGST Act. All five must hold.
- Supplier in India
- The supplier of the service is located in India.
- Recipient outside India
- The recipient of the service is located outside India.
- Place of supply outside India
- Determined under the IGST Act's place-of-supply rules, not by where the work is done.
- Payment in convertible foreign exchange
- Or in Indian rupees wherever RBI permits it.
- Not two arms of one entity
- The supplier and recipient are not merely establishments of the same person, such as an Indian company and its own foreign branch.
The Bank's Side Under FEMA
From 1 October 2026 the RBI's Export and Import Regulations 2026 apply. Services include software for these purposes.
- 1
Declaration
The exporter files an Export Declaration Form for services with the specified authority (the AD bank, or for software the AD bank or STPI; for SEZ units, the Development Commissioner) within 30 days from the end of the month in which the invoice is raised. One EDF can cover all exports in a month.
- 2
Realisation
Full value is due within 9 months from the invoice date, or 12 months if invoiced or settled in rupees. The bank can extend on request (Regulation 5).
- 3
EDPMS
The bank enters the services EDF in EDPMS within five working days and closes the entry when the money arrives; invoices up to ₹10 lakh can be closed on the exporter's declaration.
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Case: A Bengaluru Consultancy
A Bengaluru firm bills a Dubai client USD 40,000 in June for a data migration project. The client pays in August. The firm wants to know if this is an export, what it must file with the bank, and whether any incentive applies.
It is an export of services if all five IGST conditions hold; the payment in convertible foreign exchange satisfies one of them, so the firm can supply under an LUT without IGST. It files one EDF for its June invoices by 30 July. The 9-month realisation clock runs from the June invoice date, so August receipt is well inside it. There is no SEIS-type scrip. If the firm grows and crosses status-holder thresholds, its services earnings count toward recognition.
How the IIBF Exam Tests This
The syllabus lists export promotion for merchandise and services together. Expect questions that offer SEIS or MEIS as a current scheme: under FTP 2023 they are not. Also expect a question on the four modes of supply: FTP 2023 para 11.52 defines a service provider using the GATS modes (cross-border, consumption abroad, commercial presence, presence of natural persons).
FAQs
Is SEIS available under Foreign Trade Policy 2023?expand_more
No. SEIS belonged to FTP 2015-20. FTP 2023 has no services-specific reward scrip; services exporters rely on GST zero-rating and general schemes such as EPCG and status holder recognition.
Do services exporters need an IEC?expand_more
FTP 2023 para 2.05(a) says that for export of services or technology, an IEC is necessary on the date of rendering services in order to claim FTP benefits.
What is the realisation period for export of services?expand_more
Under the RBI's Export and Import Regulations 2026, nine months from the date of invoice, or twelve months if invoiced or settled in rupees, with extension possible through the AD bank.
Is export of services exempt from GST?expand_more
It is zero-rated, not exempt. The exporter can supply under a bond or LUT without paying IGST and claim refund of unused input tax credit, or pay IGST and claim a refund where permitted.
Next steps
- Foreign Trade Policy 2023arrow_forward
- EPCG Schemearrow_forward
- WTO & FTAsarrow_forward
- Syllabusarrow_forward
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