{"id":40964,"date":"2022-03-08T14:07:29","date_gmt":"2022-03-08T08:37:29","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=40964"},"modified":"2022-03-31T15:31:53","modified_gmt":"2022-03-31T10:01:53","slug":"duty-credit-scrips-for-indian-exporters","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/duty-credit-scrips-for-indian-exporters\/","title":{"rendered":"Duty Credit Scrips for Indian Exporters: Explained"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Duty Credit Scrips refers to export\npromotion benefits mentioned under the Foreign Trade Policy (FTP) 2015-20. It\naims to encourage exporters to boost the influx of overseas currency in India.\nDuty Credit Scrips facilitates tax incentives on exports, which aid exporters\nto set off their import related duties. It is granted under the schemes like)\nService Exports from India Scheme (SEIS), Merchandise Exports from India Scheme\n(MEIS<strong>), and the Export Capital Goods Scheme. <\/strong><\/p>\n\n\n\n<p>FTP 2015-20 sets out the norms around Duty Credit Scrips in India. The scheme is launched and managed by the Ministry of Commerce and Industry and DGFT, i.e. <strong>Directorate General of Foreign Trade<\/strong><sup><a href=\"https:\/\/www.dgft.gov.in\/CP\/\"><strong>[1]<\/strong><\/a><\/sup>.<\/p>\n\n\n\n<div class=\"mt-3 mb-3 embed-responsive embed-responsive-16by9\"><iframe class=\"embed-responsive-item\" src=\"https:\/\/www.youtube.com\/embed\/xHrNAoa_NUA\" frameborder=\"0\" allow=\"accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen=\"\"><\/iframe><\/div>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/duty-credit-scrips-for-indian-exporters\/#What_purpose_does_Duty_Credit_Scrips_serve_in_general\" >What purpose does Duty Credit Scrips serve in general?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/duty-credit-scrips-for-indian-exporters\/#Underlining_the_functionality_aspects_of_Duty_Credit_Scrips\" >Underlining the functionality aspects of Duty Credit Scrips<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/duty-credit-scrips-for-indian-exporters\/#Duty_Credit_Scrips_under_various_FTP_schemes\" >Duty Credit Scrips under various FTP schemes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/duty-credit-scrips-for-indian-exporters\/#Documents_to_be_shared_with_authority_for_obtaining_DCS\" >Documents to be shared with authority for obtaining DCS<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/duty-credit-scrips-for-indian-exporters\/#How_long_does_DCS_remain_valid\" >How long does DCS remain valid?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/duty-credit-scrips-for-indian-exporters\/#Sale_of_Duty_Credit_Scrips\" >Sale of Duty Credit Scrips<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/duty-credit-scrips-for-indian-exporters\/#Key_points_to_ponder\" >Key points to ponder<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/duty-credit-scrips-for-indian-exporters\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_purpose_does_Duty_Credit_Scrips_serve_in_general\"><\/span>What purpose does Duty Credit Scrips serve in general? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>DCS\ncan aid exporters to address tax liabilities. It can be used against active tax\nobligations arising out of mandatory custom duty, safeguard duty, transitional\nspecific safeguard duty, &amp; anti-dumping duty. <\/li><li>Duty\nCredit Scrip is transferable but cannot be used to skip GST, compensation cess,\nand education cess.<\/li><li>Duty\nCredit Scrip stays valid for 24 months from the date of issuance. <\/li><li>DCS\nis transferrable, and it will continue to render the same services to the third\nparty that was available to the first party. <\/li><li>One\ncan revalidate DCS by making a special request to DGFT under certain events. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Underlining_the_functionality_aspects_of_Duty_Credit_Scrips\"><\/span>Underlining the functionality aspects of Duty Credit Scrips<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>DCS aids the exporter to limit their\nexposure to tax liabilities and save cash to meet their export orders. Duty\nCredit Scrip of 2% to 5% is available to the exporters as per the EXIM Policy\nregulations.<\/p>\n\n\n\n<p>Imagine a case where an exporter has\nsecured an export order and needs to import raw material to kick start the production.\nApparently, the exporters shall need funding to execute the production and\ndispatch undertakings. At this point, the exporter has no other option than to\nuse working capital to address production and shipping requirements. This is\nwhere DCS comes into the picture. It allows the exporter to set off upfront\nliabilities without denting the working capital. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Duty_Credit_Scrips_under_various_FTP_schemes\"><\/span>Duty Credit Scrips under various FTP schemes <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Duty Credit Scrips is an exporter\nincentive instrument that is available under various schemes of FTP as shown\nbelow: <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Under MIES<\/h3>\n\n\n\n<ul><li>Within\n12 months from the date of let export order*.<\/li><li>Within\nthree months from the day, EDI bills are furnished to the DGFT portal by the\nCustoms. <\/li><li>Printing\/release\nof non-EDI shipment bills, whichever is later.<\/li><li>The application\nfiling can be done via Ayat Niryat Form 3A, along with shipment bills and eBRC.\n<\/li><li>Under\nMEIS, a DCS is facilitated upon the realization of FBO valuation of exports in\nforeign exchange @ 2-5 per cent, based on the product imported. <\/li><\/ul>\n\n\n\n<p>The Let Export Order*aka LEO is the final\nstep in the compliance checklist for exporting goods out of India. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Under SEIS<\/h3>\n\n\n\n<ul><li>In\nSEIS scrips, the due date of filing the application is 12 months from the\nclosure of the FY of the claim period. <\/li><li>Under\nSEIS, you will have to opt for the port of registration and add it to the\napplication. <\/li><li>The\nGOI shall grant incentives of 3-5 per cent to all the Service providers from\nIndian Territory to entities abroad. <\/li><li>This\nscheme came to effect in 2015. The validity duration for this scheme has been\ncapped at five years. <\/li><li>Under\nSEIS, Duty Credit Scrip is granted for 5 per cent of the overall foreign\nexchange earned. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Under EPCG<\/h3>\n\n\n\n<p><strong>Post Export EPCG Duty Credit Scrip Scheme<\/strong><\/p>\n\n\n\n<ul><li>Post-export,\nthe EPCG DCS scheme is made is accessible to Indian exporters who want to\nimport capital goods by paying the applicable duty via cash. <\/li><li>Basic\nCustom Duty addressed on capital goods will be reverted via DCS, similar to\nthose granted under Chapter 3 of Foreign Trade Policy. <\/li><li>Specific\nEO will be 85 per cent of the applicable EO under the EPCG scheme. But, the\naverage EO will remain unchanged. <\/li><li>Duty\nremission will be in accordance with the EO fulfilled. <\/li><li>Norms\nfor using scrips granted under Chapter 3 of FTP will also cover post export\nEPCG DCS.<\/li><li>All\nprovisions of the existing EPCG Scheme shall apply insofar as they are not\ninconsistent with this scheme.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_to_be_shared_with_authority_for_obtaining_DCS\"><\/span>Documents to be shared with authority for obtaining DCS <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Copy relating to the foreign inward remittance certificate<\/li><li>Copy of IEC code.<\/li><li>CA certificate<\/li><li>Copy of <a href=\"https:\/\/corpbiz.io\/learning\/rcmc-certificate-for-exporters\/\"><strong>RCMC certificate<\/strong><\/a>, i.e. Registration cum membership certificate <\/li><li>Copy relating to the invoice <\/li><li>Copy of foreign exchange earned<\/li><li>List of directors (in case of companies)<\/li><li>Board resolution<\/li><\/ul>\n\n\n\n<p>In the DGFT&#8217;s notification released in\n2019, the authority shared the decisions of phasing out hard copies of SEIS and\nMEIS DCS granted with Electronic Data Interchange port as the port of\nregistration. <\/p>\n\n\n\n<p>But, either scrip will continue to be\ntransmitted digitally from DGFT to Customs. The particulars, such as assessment\nof Bill of Entry, registration of DCS, giving out of charge, etc., shall be\naccessible to the respective officers in ICES. As an exporter, you need to\nregister the scrips with the Customs Authority. Customs House Agent shall\nrender this registration for you. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_long_does_DCS_remain_valid\"><\/span>How long does DCS remain valid? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>From the issuance date, the Duty credit\nscrip remains valid for 24 months. But the benefits prevail even after the\nexpiration of the validity period. DCS is transferrable, and hence it can be\nsold out by the exporter at any instance to any third party. Also, the exporter\nhas the liberty to revalidate the same by filing a special request under\nspecific circumstances. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Sale_of_Duty_Credit_Scrips\"><\/span>Sale of Duty Credit Scrips<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Duty Credit Scrips is a beneficial\ninstrument that empowers exporters to address upfront shipping obligations\neasily. But, in case of no export, it does make sense to sell DCS before its\nvalidity gets exhausted. The Duty Credit Scrips can be sold out in the open market\nat a price depending on the term of use and validity period.<\/p>\n\n\n\n<p>For example: if you have a DCS worth Rs.\n2,00,000, which implies that it can be utilized to pay duties and taxes\nequivalent to Rs 2,00,000. Buying at a discounted price doesn&#8217;t hinder the face\nvalue of the scrip. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_points_to_ponder\"><\/span>Key points to ponder<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol><li>The scrips holder primarily uses them to address the shipping liabilities that appear in the form of customs duty and applicable taxes. Scirps are transferrable and can be sold to any third party, including the importer in the business transaction. <\/li><li>The facility of Duty Credit Scrips is available under several schemes launched under the FTP. The names and benefits under these schemes are subjected to changes that could occur from time to time. <\/li><li>These scrips are granted by the DGFT&#8217;s regional office.<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Exporting activities attract significant duties and taxes. This is where Duty Credit Scrip comes into the picture. It enables exporters to extinguish immediate liabilities such as customs duty and additional customs duty by solving their fiscal issues. Therefore, Duty Credit Scrip plays a vital role in the shipping business and serves as an asset for exporters. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our Article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/how-to-get-lmpc-certificate-to-import-pre-packaged-goods-in-india\/\">How to Secure LMPC Certificate to Import Pre-packaged Goods in India?\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Duty Credit Scrips refers to export promotion benefits mentioned under the Foreign Trade Policy (FTP) 2015-20. It aims to encourage exporters to boost the influx of overseas currency in India. Duty Credit Scrips facilitates tax incentives on exports, which aid exporters to set off their import related duties. It is granted under the schemes like) [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":40971,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[165],"tags":[2172],"acf":{"service_id":"16"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":10201,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/40964"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=40964"}],"version-history":[{"count":11,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/40964\/revisions"}],"predecessor-version":[{"id":41687,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/40964\/revisions\/41687"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/40971"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=40964"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=40964"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=40964"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}