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mis-classified / mis-declared their software, information technology and computer related services as “management consultancy services”, “technical testing and analysis services”, “engineering
services”, “audio visual services”, “advertisement services”, etc. to avail undue benefit of SEIS, thereby violating the provisions of Foreign Trade Policy.
CHAPTER 6: FOREIGN TRADE POLICY: MISUSE OF SCHEMES 81
In a case booked by DRI, a wholly owned subsidiary of a major airline, had wrongly claimed the benefit of SEIS scrip by classifying the service being provided by them as Cargo Handling Service. Verification of the financial statements for the relevant period revealed that the main revenue of the company was on account of passenger services in terms of Air Transport, which is an ineligible service under SEIS scheme.
Another source of revenue of the Company was on account of cargo and excess baggage, which was provided by another subsidiary of the airline engaged in ground handling /cargo handling services and thus the cargo handling services were not being provided directly by the said wholly-owned subsidiary. SEIS benefits are eligible to be claimed only by the actual service provider. Additionally, it was also found that another subsidiary had also claimed SEIS benefit for cargo handling service, thus leading to double benefits being claimed by the group as a whole.
In a case booked by DRI, a firm had used the modus operandi of declaring the same service differently three times in various applications to DGFT, Mumbai which showed their malafide intention to somehow avail the SEIS benefit.
The said firm had obtained SEIS scrips from DGFT fraudulently by mis-declaring their “medical transcription” service as “hospital service” (CPC- 9311) (6A of Appendix 3D) or “library, archives, museum and other cultural service” (CPC- 963) (8C of Appendix 3D) from 2015 to 2019, which resulted in evasion of Customs Duty to the tune of Rs. 55 Crore, through a total 105 duty scrips.