1)At the time of Purchase of Assets or Spares Custom duty debited to Assets or Material Purchase now I have a question at the time of availing SFIS credit which account should be debited for availing the SFIS Credit.
2)I have already created SFIS receivable provision in the books.
3)If at the time of purchase I have debited to Assets than availing of credit should be credited to Assets account ? 4) If at the time of purchase I have debited to Material purchase than availing of credit should be credited to Material purchase account ?
Above issues related to accounting OF SFIS credit receivable and avail of credit.
09 January 2013
SFIS can be utilised only for purchase of assets and not materials. You better credit to SFIS receivable at the time of utilising credit.
09 January 2013
Served From India Scheme is applicable for Indian service providers rendering services listed in Appendix 41 of Handbook of Procedures 2009-14 (we understand that consulting services are covered under this Appendix) and having free foreign exchange earning of at least R10 lakh in the current financial year. The eligible service providers are entitled to a Duty Credit Scrip equivalent to 10% of the free foreign exchange earned during current financial year which may be used for import/domestic procurement of eligible capital goods, including spares, office equipment, professional equipment, office furniture, etc. Further, the imports of goods may relate to any service sector business of the applicant. Accordingly, you should be entitled to avail of the benefit of the Duty Scrip under the SFIS scheme for import of office equipment provided such equipment is being used for your eligible service business (irrespective of whether domestic or exports). However, we would like to highlight that a meeting of the Policy Interpretation Committee of the Directorate General of Foreign Trade was held in December 2011 wherein it was decided that benefits of SFIS are not available to brands created outside India as the objective of the FTP is to encourage only Indian Brands and not incentivize any brand created outside India. Accordingly, even though the FTP itself does not specifically debar availability of SFIS to brands created outside India, the above interpretation is likely to be followed by the authorities to deny the SFIS Scrip to non-Indian brands.
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