Being one of the most sought-after export promotion incentives provided by the Government of India, the Duty Credit Scrips Scheme encourages exports. Issued under the Foreign Trade Policy, the Duty Credit Scrips Scheme aims at incentivizing exporters to maximize the inflow of foreign exchange to India.
Duty credit scrips are issued to exporters of goods and exporters of services as well, by the Director General of Foreign Trade (DGFT). With the duty credit scrips, the holder can pay various duties or taxes to the central government.
The Duty Credit Scrips are applicable to be issued through various schemes under the Foreign Trade Policy. Below mentioned are the schemes under which Duty Credit Scrips can be issued:
- Merchandise Exports from India Scheme (MEIS) for merchandise exporters
- Service Exports from India Scheme (SEIS) for the service exporters
- Export Promotion Capital Goods Scheme (EPCG Scheme)
The worth of Duty Credit Scrip would be different under different schemes. Its value would vary depending on the products and country as well. However, in most cases, the scrip value ranges from 2% to 5% of the realized Free On Board (FOB) value.
Due to the high potential of the export industry in employment generation, the Government of India has put forth this incentive. Thus, Duty Credit Scrips are issued to the exporters by the Government of India to encourage exports. As exports along with bringing the foreign exchange to our country, also result in job creation on a large scale.
However, there’s another motive behind issuing the Duty Credit Scrips which is to counterbalance the infrastructural inefficiencies and related costs included in the export of items produced or manufactured in India. Further, this would also contribute effectively to the Make in India campaign launched by the Government of India.