How to apply for Duty Credit Scrips?
There are multiple types of Duty Scrips i.e. different category of Duty Scrips that an exporter receives basis on its item of export. And the percentage i.e. amount of the benefit depends upon the exact HSN code and country of export. Current prevalent duty scrips are MEIS, SEIS, RosCTL and EPCG.
While MEIS, SEIS and RoSCTL are quite similar and are received by the exporter as x% of the total FOB value of export. EPCG is little different in such as the EPCG duty credit scrip scheme is made available to exporters who intend to import capital goods by paying the applicable duty in cash. The basic customs duty paid on Capital Goods shall be remitted in the form of freely transferable duty credit scrip(s), similar to those issued under Chapter 3 of FTP. Specific EO shall be 85% of the applicable EO under the EPCG Scheme. However, average EO shall remain unchanged. Duty remission shall be in proportion to the EO fulfilled. All provisions for utilization of scrips issued under Chapter 3 of FTP shall also be applicable to Post Export EPCG Duty Credit Scrip(s).
Application Process
In a 2019 notification, the DGFT decided on phasing out physical copies of MEIS, SEIS & RoSCTL Duty Credit Scrips issued with Electronic Data Interchange (EDI) port as the port of registration.
However, these scrips will continue to be transmitted electronically from DGFT to Customs. The details, such as registration of DCS, assessment of Bill of Entry, giving out of charge, etc will be available to the concerned officers in ICES. The documents required for the application have been also reduced significantly with a subject matter expert able to apply for the same with just exporter’s Digital Security Key (for DGFT).
From the date of issue, a duty scrip remains valid for 24 months. Generally, the exporter doesn’t have use of the scrip and they transfer it to another person who can use it against their own outstanding tax/duty liability.
How to Sell Duty Credit Scrips?
The credit script is sold when the exporter has no use of the incentives and for a fact that it would actually be the only profit, this entity would make.
There is no organized market for this type of transfer and in the case of peer-to-peer (P2P) transfers, DCS is generally sold at a discount.
Tirupati Impex facilitates the sale of these Duty Scrips for exports for nominal fees.
For instance, if an exporter has a duty credit scrip worth Rs. 2,00,000 & he sells it to a buyer for Rs. 1,95,000 maintaining the face value as 2,00,000 for the buyer. It works in favour of both, the buyer as well as the exporter.
