1. Served From India Scheme (SFIS)
Introduction
SFIS is a Reward / Incentive Scheme introduced by the Ministry of Commerce, Government of
India. It is covered under Chapter 3 of Foreign Trade Policy (FTP) and Hand Book Procedure
(HBP). Objective of this scheme is to accelerate growth in export of services so as to create a
powerful and unique ‘Served From India’ brand, instantly recognized and respected world over.
It is interesting to note that 56% of GDP in India comes from the services sector (data for 2010-
11) and it is all set to increase in the coming years. It is only but natural that the Government of
India encourages export of services alongwith the indigenous market through several measures
like direct and indirect tax exemptions, setting up of Software Technology Parks (STPI) and
Special Economic Zones (SEZ) etc. Additionally service providers rendering certain category of
services can make use of the SFIS which is the simple and efficient scheme.
Before understanding how the SFIS works, it is worth knowing certain key terminologies used in
FTP as below:
• Person means an individual, firm, society, company, corporation or any other legal person
including the DGFT officials.
• Services include all tradable services covered under General Agreement on Trade in
Services and earning free foreign exchange.
• Service Provider means a person providing
i. Supply of a ‘service’ from India to any other country;
Eg: Supply of architecture service from India to France.
ii. Supply of a ‘service’ from India to service consumer of any other country in India;
Eg: Providing hospitality service to a foreigner who visits India.
iii. Supply of a ‘service’ from India through commercial or physical presence in territory of
any other country;
Eg: Providing services from a Branch Office, Joint Venture etc established outside India.
iv. Supply of a ‘service’ in India relating to exports paid in free foreign exchange or in Indian
Rupees which are otherwise considered as having being paid for in free foreign
exchange by RBI.
Eligibility
All Indian Service Providers providing services as specified by DGFT (Directorate General of
Foreign Trade) (List of services as mentioned in Appendix 10 of HBP) are eligible for Duty
Credit Scrip (DCS). Categorized under 12 broad headings there are about 135 services listed
that are eligible under SFIS. Broadly they include Business Services, Communication Services,
Construction and Related Engineering Services, Distribution Services, Educational Services,

2. Environmental Services, Financial Services, Health-Related And Social Services, Tourism And
Travel-Related Services, Recreational, Cultural And Sporting Services, Transport Services and
Other Services.
Service Providers, who have free foreign exchange earning of at least Rs. 10 Lakhs in
preceding financial year / current financial year shall qualify for DCS. For Individual Service
Providers, minimum limit is Rs 5 Lakhs. It may be noted that the eligibility is not on the
revenue clocked / accounted but actual earnings realized in free foreign exchange.
Entitlement
All Service Providers shall be entitled to DCS equivalent to 10% of free foreign exchange
earned during current financial year.
Eligible & Ineligible Remittances
Foreign exchange remittances earned for rendering of services would be eligible for DCS. Free
foreign exchange earned through International Credit Cards and other instruments as permitted
by RBI for rendering of service shall also be taken into account for computation of DCS.
Foreign exchange remittances other than those that are earned for rendering of services would
not be counted for entitlement. Eg: equity or debt participation, donations, receipts of repayment
of loans etc.
Usage of Duty Credit Scrip
DCS may be used for import of any capital goods including spares, office equipment and
professional equipment, office furniture and consumables; that are otherwise freely importable
and / or restricted under ITC (HS). Imports shall relate to any service sector business of
applicant.
Utilization of DCS earned shall not be permitted for payment of duty in case of import of
vehicles, even if such vehicles are freely importable under ITC (HS).
In case of hotels, clubs having residential facility of minimum 30 rooms, golf resorts and
stand-alone restaurants having catering facilities, DCS may also be used for import of
consumables including food items and alcoholic beverages.
Non Transferability
Entitlement / goods (imported / procured) shall be non transferable (except within group
company and managed hotels) and be subject to Actual User condition.
Procurement from Domestic Sources
Utilization of DCS shall be permitted for payment of excise duty in terms of Central Excise
Notification issued in this behalf for procurement from domestic sources, of items permitted for
imports under SFIS Duty Credit Scrip.

3. How to apply for Duty Credit Scrip
For foreign exchange earned during current financial year, application for DCS shall be filed on
monthly/quarterly/half-yearly/annual basis, at the option of the applicant to be exercised along
with first application for the current financial year, with jurisdictional Regional Authority (DGFT
office). Following documents shall be submitted:
- Application in ANF 3B
- Certificate from CA/CS/CWA as per the format given in Annexure to ANF 3B
- Documentary evidence of earning in Indian Rupees
The last date for filing application on time shall be 12 months from the end of relevant month /
quarter / half-year /year periodicity.
Service provider shall within one month of completion of imports made or expiry of validity of
Duty Credit scrip whichever is earlier, submit a statement of imports made under it to
jurisdictional RA with a copy to jurisdictional Excise authorities (service tax cell) wherever
applicable.
Conclusion
Service providers who are not registered as EOUs or as an SEZ can still leverage on the
exports made and utilize SFIS optimally. As in the case of any Export Incentive Scheme under
the EXIM Policy, service providers intending to avail the benefit under SFIS must necessarily
have IEC code and RCMC (Registration Cum Membership Certificate) with an Export Promotion
Council (EPC). Where there are no sector specific EPCs, service providers may register with
FIEO (Federation of Indian Export Organisation).
Disclaimer:
The above does not purport to be legal advice and is meant to only clarify certain regulatory and
practical aspects as elaborated above. For specific clarifications / legal advice feel free to write
to info@lexvalorem.com. For more such articles visit http://lexvalorem.com/resorcecenter.html