Kerala High Court while hearing a plea submitted by Kerala Travel Mart (KTM) Society and a group of tour operators based in the state has asked the central government to explain the reasons for the delay in releasing SEIS dues.
The plea highlighting the hold-up in the release of SEIS (Service Export from India Scheme) dues for the financial year 2019-2020 was filed in December last year at the High Court.
While taking cognizance of the central government’s failure to prepare its reply affidavit even after few hearings on the plea, the court said that it will pass an order if the reply affidavit is not prepared before March 16th.
“As inbound tourism has come to a halt since March last year, a lot of tour operators have gone out of business. In absence of soft loans offered to us by any financial institute, SEIS is the only way of getting some kind of cash flow. SEIS dues are pending for over 12 months now and should be released urgently,” said James Kodianthara, Managing Director, Concord Exotic Voyages – one of the parties who had submitted the plea.
The SEIS is an incentive given by the Ministry of Commerce through the Directorate General of Foreign Trade (DGFT) to service exporters based in India. This reward scheme is to promote the export of services from India.
Under SEIS, exporters of selected services are entitled to a 3% / 5% / 7% incentive on the net foreign exchange earned in the form of duty credit scrips. These SEIS scrips can be used to pay import duty or can be encashed by selling it to any importer. Therefore, it is as good as a cash incentive scheme.
Presently, tour operators are offered a 7% incentive on the net foreign exchange earned. Many trade associations have requested the government to increase the SEIS incentive to 10% considering the challenges faced by inbound tourism post the pandemic outbreak.