CHENNAI: The Union Government has liberalised the scheme for promotion of export of services by including domestic supplies for purposes of utilisation of duty credit.

According to a notification dated June 14, issued by the Directorate-General of Foreign Trade (DGFT), a new paragraph (3.6.4.10) is being inserted in the Served from India Scheme of the Foreign Trade Policy (FTP) 2004-09.

As per the new provision, "utilisation of duty-free credit scrip earned under the Scheme will be permitted for payment of excise duty in terms of the notification issued by the Department of Revenue in this behalf for procurement from domestic sources of such inputs that are permitted for imports under Para 3.6.4.5.''

This means that the duty credit scrip may be used for procuring within the country capital goods, including spares, office equipment and professional equipment, office furniture and consumables that are otherwise freely importable under the ITC (HS) Classification of Export and Import items. Such procurement should relate to any service sector business of the applicant.

The Served from India scheme covers all the 161 tradable services covered by the General Agreement on Trade in Services (GATS) of the World Trade Organisation (WTO). However, unlike in the case of merchandise exports, the entitlement of duty scrips and the goods imported (and, presumably, goods procured domestically too) are not transferable except within service providers of a group company and managed hotels (in terms of Para 3.6.4.6 of the FTP).

PTI reports:

The list of Latin American countries, which the Government has notified under the Focus Market scheme to get duty benefits, includes Argentina, Bolivia, Chile, Ecuador, Paraguay, Peru, Uruguay and Venezuela. However, Brazil, Colombia, Surinam and Guyana have been excluded from the scheme.

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