IT, other key services deprived from export benefit

New Delhi, Jan 19 (PTI) Dealing a major blow toexporters, the government has stopped giving incentives toexports of IT and ITeS, telecommunication and airlinesservices.

The list of services eligible for duty credits under the''Served From India Scheme (SFIS) has been pruned by removingimportant areas such as computer consultancy services,software implementation, data processing and databaseservices.

Under the SFIS, exporters of services were given dutycredit equivalent to 10 per cent of foreign exchange earnedduring the current financial year.

Of about USD 60 billion IT and ITeS services, exportscontribute about USD 50 billion and with the removal of theSFIS benefit, the bottomline of the software exporters isbound to get a hit, industry sources said.

Apex body of exporters FIEO said "it is certainly a bigsetback for the services exporters, especially at a time whenthey were grappling with fragile global recovery".

Other services affected would include telecommunications,real estate, financial and fuel transport by pipelines.

The changes have been notified by the Directorate Generalof Foreign Trade (DGFT), which has come out with a newexhaustive list of services eligible for SFIS.

Further, the eligibility criteria has been tightened. PTIRR PC