The government imposed a limit on the total entitlement under Services Export Incentive Scheme (SEIS) during 2019-20, at Rs INR crore per organisation. The Directorate General of Foreign Trade (DGFT) has notified a list of eligible services and rates under the Services Exports from India Scheme (SEIS) for exports made during 2019-20 is being notified.
In a notification, the DGFT said, “A limit of total entitlement under SEIS has been imposed for service exports rendered in the period April 1, 2019, to March 31, 2020, and capped at INR 5 crore import-export code (IEC).” Further, the companies can claim benefits under SEIS on payments in Indian rupees would not be available for services rendered in 2019-20.
While the Indian Association of Tour Operators (IATO) welcomed the SEIS notification for FY2019-20, it was disappointed that this has been reduced from 7% to 5%. The trade body noted that the past 18 months was the worst phase for tour operators. In light of the debilitating hardship ensured by these stakeholders, it urged the government to restore SEIS benefit to 7%, as was paid a year before.
Talking about this, IATO’s President, Rajiv Mehra said that many inbound tour operators had near zero income since March 2020 and several of them wound up their businesses. “In view of that, the SEIS benefit was awaited for a long time as this would provide some financial succor that would help the tourism sector tide over this crisis. During deliberations the government was requested to raise it to 10% as a one-time measure. However, the lowering of the benefit and capping it to INR 5 crore is disappointing,” he opined. He requested the government to at least raise it to 7% and remove capping of INR 5 crore at least for the tourism and hospitality industry.
According to him, reducing this to 5% will impact small and medium tour operators while capping of INR 5 crore will badly impact the large tour operators. He also pointed out that tourism has contributed significantly to the exchequer and has been a major employer. “In a distressful situation like this, the tourism sector looks for assistance from the government for survival and revival,” he summed up.
