SFIS Scheme-reg

[N Balachandran]

Sir,

When we execute the contract  for Supply ,  Fabrication and erection of Storage tank outside india, will it fall under category of Servce from India Scheme?.

The contract is lumpsum price and 80% of supply goes from out Side india. The fabrication and erection work  (15% of Contract value ) carried out  through the sub contractor who is also located outside india under the suprevision of Indian Engineers.

Pl clarify;

!. can we consider  this turnover as export turnover ?

2. Are we eligible for Incentive script under SFIS scheme? if so in which  category the contract has to be classified?.  Is it appropirate to say, Construction and Erection activity services?.

3. Are we eligbile for getting the Star Trading house Status as the contract value is more Rs.35 Crores

Regards

N.Balachandran

[YAGAY andSUN]

Please check the Place of Provision of Service Rules, 2012 in this regard.

Since your 80% supply will be resourced from outside of India and 15% of the services will be provided by the subcontractor, therefore, it may be not treated as export of goods and export of services from India for the purpose of availing the benefits of export promotion schemes.

[YAGAY andSUN]

On remaining 5% services, you may avail the SFIS if you fall under the eligible cretarion.

You may not get the Star Trading House Status since the (80% of goods + 15% of Services) are being outsourced and not from India.

 

AI Summary

Export turnover classification: foreign-sourced supplies and subcontracted services generally exclude contract from export turnover and SFIS eligibility. Where the majority of goods are sourced abroad and substantial services are outsourced to a foreign subcontractor, the contract will generally not qualify as export turnover or as export of services from India for export promotion schemes; only the small portion of services actually supplied from India may be eligible for SFIS if specific eligibility criteria are satisfied.