What is Scrip and How Do Duty Credit Scrips Work?
What is Scrip and How Do Duty Credit Scrips Work?
Mar 22, 2024
15 Mins
Scrip, an alternative to legal tender, plays a significant role in India's Foreign Trade Policy as 'Duty Credit Scrips.' These scrips serve as export incentives provided by the government to exporters, enabling them to pay various taxes and duties to the central government.
The Duty Credit Scrips are issued by the Director-General of Foreign Trade (DGFT) and can be utilized to make Customs Duty payments. They are available to both exporters of goods and exporters of services, based on various schemes outlined in the Foreign Trade Policy. The value of the scrip varies depending on the scheme, typically ranging between 2% and 5%.
The primary purpose of duty credit scrips is to encourage exports by granting import tariff concessions to exporters. Consequently, exporters can benefit from reduced import duties, typically calculated as a fixed percentage of the export value.
Moreover, duty credit scrips provide duty deduction or non-payment of taxes for a specific period. The value of the scrip or amount of tax reduction is determined by a percentage of the exporter's export turnover. To promote flexibility, these scrips can be transferred to other parties, allowing exporters the freedom to transfer them to importers.
SEIS scrip, also known as Service Exports from India Scheme, aims to promote India's service exports. The scheme rewards eligible exports of services with duty scrip credits. Indian service providers can qualify for these credits if they meet specific requirements such as having a net free foreign exchange earnings of at least USD 15,000 in the preceding financial year and an active Import Export Code while rendering the service.
On the other hand, MEIS scrip, or Merchandise Exports from India Scheme, serves as an incentive scheme for exporters of goods produced or manufactured in India. Under this scheme, exporters receive duty credit scrips, which can be used to pay various customs duties, including safeguard duty, anti-dumping duty, and other customs duties specified in the Foreign Trade Policy 2015-2020. MEIS scrips are transferable and can also be used to import goods.
In conclusion, duty credit scrips provide exporters in India with a means to pay customs duties and taxes, thereby encouraging exports. With the aim of boosting international transactions, these scrips play a vital role in promoting both service and merchandise exports from India.
Scrip, an alternative to legal tender, plays a significant role in India's Foreign Trade Policy as 'Duty Credit Scrips.' These scrips serve as export incentives provided by the government to exporters, enabling them to pay various taxes and duties to the central government.
The Duty Credit Scrips are issued by the Director-General of Foreign Trade (DGFT) and can be utilized to make Customs Duty payments. They are available to both exporters of goods and exporters of services, based on various schemes outlined in the Foreign Trade Policy. The value of the scrip varies depending on the scheme, typically ranging between 2% and 5%.
The primary purpose of duty credit scrips is to encourage exports by granting import tariff concessions to exporters. Consequently, exporters can benefit from reduced import duties, typically calculated as a fixed percentage of the export value.
Moreover, duty credit scrips provide duty deduction or non-payment of taxes for a specific period. The value of the scrip or amount of tax reduction is determined by a percentage of the exporter's export turnover. To promote flexibility, these scrips can be transferred to other parties, allowing exporters the freedom to transfer them to importers.
SEIS scrip, also known as Service Exports from India Scheme, aims to promote India's service exports. The scheme rewards eligible exports of services with duty scrip credits. Indian service providers can qualify for these credits if they meet specific requirements such as having a net free foreign exchange earnings of at least USD 15,000 in the preceding financial year and an active Import Export Code while rendering the service.
On the other hand, MEIS scrip, or Merchandise Exports from India Scheme, serves as an incentive scheme for exporters of goods produced or manufactured in India. Under this scheme, exporters receive duty credit scrips, which can be used to pay various customs duties, including safeguard duty, anti-dumping duty, and other customs duties specified in the Foreign Trade Policy 2015-2020. MEIS scrips are transferable and can also be used to import goods.
In conclusion, duty credit scrips provide exporters in India with a means to pay customs duties and taxes, thereby encouraging exports. With the aim of boosting international transactions, these scrips play a vital role in promoting both service and merchandise exports from India.
Author
Pluto Team
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