Several services sectors are fretting about being excluded or given lower incentive rates under the Service Exports from India Scheme (SEIS), whose benefits for 2019-20 were notified on Thursday, even as exporters voiced concern about the ₹5 crore cap on entitlements.
The tourism sector has been granted a 5% benefit on net foreign exchange earnings as opposed to 7% earlier, while some sectors like management consulting and cargo handling have been excluded altogether.
“Services such as management consulting services, technical testing and analysis services, support services for maritime transport and cargo handling services, which were eligible during earlier periods, are excluded now,” T. Viswanathan, principal partner, Lakshmikumaran & Sridharan Attorneys, told The Hindu. “Moreover, the rate of SEIS benefit has also been reduced by 2% from earlier specified rates.”
The tight December 31 deadline set for firms to claim their benefits would also cause inconvenience, Mr. Viswanathan said. On the ₹5 crore cap on benefits, he noted that a similar value cap of ₹2 crore had been placed under the Merchandise Exports from India Scheme as well, which was under challenge before various High Courts.
The Indian Association of Tour Operators (IATO) said it was ‘a tad disappointed’ about the cut in the SEIS benefits, especially since the industry had faced one of its worst phases over the past year-and-a-half and endured ‘debilitating hardship’.
“Inbound tour operators had almost zilch income with several of them folding up their businesses,” said IATO pesident Rajiv Mehra. “So the SEIS benefit was awaited as it would provide some financial succour and help tide over this crisis,” he said, stressing that tourism was a major employer.
