Date:10/10/2004 URL: http://www.thehindubusinessline.com/2004/10/10/stories/2004101001890300.htm

Back Labour remittances not eligible for new benefits

K.R. Srivats

New Delhi , Oct. 9

LABOUR remittances into the country would not be counted for duty credit entitlement under the recently launched `Served from India' scheme, the Directorate-General of Foreign Trade (DGFT) has said.

Further, foreign exchange remittances such as foreign currency loans, export proceed realisation of clients, issuance of foreign equity through American depository receipts (ADRs)/global depository receipts (GDRs) and issuance of foreign currency bonds will also not be counted for the entitlement under the scheme.

Informed sources said that the DGFT has now held that "the duty credit under the `Served from India' scheme would not be available on the remittances earned through contract or regular employment abroad." Inward remittances from Indians working abroad touched $19.2 billion in 2003-04, as compared to a level of $15.17 billion in the previous year.

The `Served from India' scheme was unveiled on August 31 in the Foreign Trade Policy to accelerate growth in services exports. This scheme allows individual service providers who earn forex of at least Rs 5 lakh and other service providers who earn forex of at least Rs 10 lakh to avail themselves of duty credit entitlement of 10 per cent of the forex earned.

The DGFT has also now clarified that the benefit of duty credit under the `Served from India Scheme' would be available only to those remittances that are received as service charges and fees levied for the specific services rendered by the applicant. The `Served from India' scheme is basically a revamped version of the earlier duty-free entitlement certificate (DFEC) scheme.