Scribd
Upload
31 views7 pages

Duty Credit Scrips - All About Duty Credit Scrips, Its Utilisation and Benefits

Duty Credit Scrips (DCS) are export promotional benefits provided by the Government of India to facilitate exports and enhance foreign exchange inflows. They allow eligible exporters to reduce import taxes by utilizing DCS against various customs duties, with a validity of 24 months and the ability to transfer them. The sale of DCS is exempt from Goods and Services Tax (GST), ensuring that exporters can benefit from this incentive without additional tax burdens.

Uploaded by

Rahul Sharma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
31 views7 pages

Duty Credit Scrips - All About Duty Credit Scrips, Its Utilisation and Benefits

Duty Credit Scrips (DCS) are export promotional benefits provided by the Government of India to facilitate exports and enhance foreign exchange inflows. They allow eligible exporters to reduce import taxes by utilizing DCS against various customs duties, with a validity of 24 months and the ability to transfer them. The sale of DCS is exempt from Goods and Services Tax (GST), ensuring that exporters can benefit from this incentive without additional tax burdens.

Uploaded by

Rahul Sharma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 7

5/21/2019 Duty Credit Scrips | All about Duty credit scrips, its utilisation and benefits

Home (https://vjmglobal.com/) » Blog (https://vjmglobal.com/category/blog/) » Export Incentives


(https://vjmglobal.com/category/blog/export-incentives/) » All about Duty Credit Scrips (DCS)
(https://vjmglobal.com/

All about Duty Credit Scrips (DCS)

KAPIL MITTAL(HTTPS://VJMGLOBAL.COM/AUTHOR/KAPIL/)

MARCH 6, 2019(HTTPS://VJMGLOBAL.COM/2019/03/06/)

Table of Content [hide]

1 How to apply for Duty Credit Scrip (‘DCS’)


2 How to determine the value of Duty Credit Scrip (‘DCS’)?
3 How does the DCS help in reducing taxes at the time of imports?
4 What are the import taxes against which Duty Credit Scrip (‘DCS’) can be utilised?
5 How long are the Duty Credit Scrip (‘DCS’) valid?
6 Is the Duty Credit Scrip (‘DCS’) transferable?
7 Applicability of GST on sale of Duty Credit Scrips (‘DCS’)
(https://web.whatsapp.com/send?phone=+919891576441)

https://vjmglobal.com/blog/export-incentives/duty-credit-scrips-dcs/ 1/7
5/21/2019
Duty Credit Scrip (‘DCS’) is one ofDuty
theCredit Scrips | All about Duty credit scrips, its utilisation and benefits
export promotional benefit provided by the Government of
India to the Indian exporters. The DCS benefit to exporters facilitates exports and fosters foreign
exchange inflows into India.

The Foreign trade Policy 2015-2020 prescribes the features and detailed provisions governing Duty
Credit Scrip (‘DCS’). The Ministry of Commerce and Industry of the Government of India along with
(https://vjmglobal.com/
the Director General of Foreign Trade (‘DGFT’) implement and administer the scheme. The objective
of duty credit scrips (DCS) is to promote exports by way of providing a tax incentive on exports
(https://vjmglobal.com/blog/export-incentives/incentives-to-exporters/) to be set off against import
taxes.

The Director General of Foreign Trade (‘DGFT’) issues Duty Credit Scrip (‘DCS’) to eligible exports
upon an filing an application in the prescribed format and procedure.

Duty Credit Scrip (‘DCS’) is a recognised physical authorisation which permits the holder to import
goods without payment of taxes, upto to the face value of the Duty Credit Scrip (‘DCS’).

With the help of DCS, exporters having imports of capital goods could optimise tax cash outflows and
avoid working capital blockages at the time of imports.

How to apply for Duty Credit Scrip (‘DCS’)


Exporters eligible for incentives under the Merchandise Exports from India Scheme (MEIS) and the
Service Exports from India Scheme (SEIS) (https://vjmglobal.com/blog/export-incentives/seis-export-
incentive/)may apply for Duty Credit Scrip (‘DCS’). (https://vjmglobal.com/blog/export-incentives/seis-
export-incentive/)

See the following link for the Procedure for application of Duty Credit Scrip (‘DCS’)
(https://vjmglobal.com/blog/export-incentives/procedure-for-application-under-service-export-from-
india-scheme-seis/)

How to determine the value of Duty Credit Scrip


(‘DCS’)?
DCS derives its value from the percentages defined under the relevant scheme of the Foreign Trade
Policy. The value of DCS varies from each product, scheme and country of export.

Typically, the value of DCS ranges from 2% to 5% of the export value determined on Free on Board
(‘FOB’) basis. In order to issue Duty Credit Scrip (‘DCS’), the FOB value of the goods should be
realized in free foreign exchange within the prescribed timelines.

(https://web.whatsapp.com/send?phone=+919891576441)

https://vjmglobal.com/blog/export-incentives/duty-credit-scrips-dcs/ 2/7
How does the DCS help in reducing taxes at the time
5/21/2019 Duty Credit Scrips | All about Duty credit scrips, its utilisation and benefits

of imports?
Take a situation where an exporter having a Duty Credit Scrip (‘DCS’) of INR 1,50,000 is importing
goods for manufacture/ rendering services. The value of goods is INR 25,00,000(https://vjmglobal.com/
and the customs
duty on the imported goods amounts to INR 2,50,000.

In this situation, the exporter would be able to utilise the Duty Credit Scrip (‘DCS’) towards the
outstanding customs duty payable to the extent of INR 2,50,000 and remit the balance INR 1,00,000
in cash.

What are the import taxes against which Duty Credit


Scrip (‘DCS’) can be utilised?
Duty Credit Scrip (‘DCS’) can be utilized by the holders for payment of their outstanding tax liabilities
or alternatively transferred to others.

The DCS holders can utilize DCS for payment of outstanding liabilities for the following import taxes:

Basic Customs Duty


Additional Customs Duty under Sections 3(1), 3(3) and 3(5) of Customs Tariff Act
Safeguard Duty
Transitional Specific Safeguard Duty
Anti-Dumping Duty
It is pertinent to note that DCS cannot be used for payment of the following taxes:

Goods and Services Tax (‘GST’)


Compensation cess
Education cess

How long are the Duty Credit Scrip (‘DCS’) valid?


The Duty Credit Scrip (‘DCS’) is valid for a period of 24 months from the date of issue. Hence, it is
important for the exporters holding DCS to evaluate the future utilisation requirements of DCS.

If the exporters do not foresee a need to utilise DCS in future, they may transfer the DCS. A DCS
holder can transfer DCS to any person who would be able to utilise the same against his own
outstanding import taxes.

In certain circumstances, the DGFT (https://dgft.gov.in/) has the authority to revalidate the Duty
Credit Scrip (‘DCS’) based on a specific request of the holder
(https://web.whatsapp.com/send?phone=+919891576441)

https://vjmglobal.com/blog/export-incentives/duty-credit-scrips-dcs/ 3/7
Is the Duty Credit Scrip (‘DCS’) transferable?
5/21/2019 Duty Credit Scrips | All about Duty credit scrips, its utilisation and benefits

Yes. The Duty Credit Scrip (‘DCS’) is freely transferable. A DCS holder can utilise a DCS to set off
his import tax liabilities.

DCS is not an off the shelf product available for sale. There is no organised market present in India
(https://vjmglobal.com/
for the purchase and sale of Duty Credit Scrips (‘DCS’). The Duty Credit Scrip (‘DCS’) generally sell
at a discount as the market buyers are distributed.

Nevertheless, the Duty Credit Scrip (‘DCS’) is helpful for both the buyer and the seller.

Applicability of GST on sale of Duty Credit Scrips


(‘DCS’)
DCS is classified as a good under the provisions of the Goods and Services Tax (‘GST’) law. In the
absence of any specific exemption, the sale of DCS earlier attracted GST.

This defeated the very benefit of holding and transferring a DCS. Several stakeholders brought this
to notice of the Central Board of Indirect taxes and Customs (‘CBIC’) for a resolution.

Vide Notification No. 35/2017-Central Tax (Rate) dated 13 October 2017, the CBIC exempted the
sale of DCS from the purview of GST. Hence, sale of Duty Credit Scrips under GST is an exempt
transaction.

Read more aboutIEC Importer Exporter Code (https://vjmglobal.com/blog/export-incentives/iec-


importer-exporter-code/)

Read more about Export Incentives in India (https://vjmglobal.com/blog/export-incentives/incentives-


to-exporters/)

DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this
article are solely for informational purpose. It does not constitute professional advice or recommendation of
rm. Neither the author nor rm and its a liates accepts any liabilities for any loss or damage of any kind
arising out of any information in this article nor for any actions taken in reliance thereon.

Don’t forget to share this post!

(https://web.whatsapp.com/send?phone=+919891576441)

https://vjmglobal.com/blog/export-incentives/duty-credit-scrips-dcs/ 4/7
5/21/2019 Duty Credit Scrips | All about Duty credit scrips, its utilisation and benefits

(https://vjmglobal.com/blog/company-law/roc-co (https://vjmglobal.com/blog/export-incentives/inc

(https://vjmglobal.com/
SEIS Incentives (https://vjmglobal.com/our-
services/seis-incentive/)
Know more about our SEIS Incentives services.

Call us and know how we are helping companies claim SEIS Incentives.

CALL NOW

Related Posts:
GST Amendment Act, 2018 & Its Impact: 20 Major Changes (https://vjmglobal.com/blog/gst/gst-
amendment-act-2018-major-changes/)
FAQ on Registration by GST (https://vjmglobal.com/blog/gst/gst-registration/faq-on-registration-by-
gst/)
Transfer of Stock and Input credit under GST (https://vjmglobal.com/blog/transfer-of-stock-and-
input-credit-under-gst/)
Export Incentives in India | Incentives for Exporters (https://vjmglobal.com/blog/export-
incentives/incentives-to-exporters/)
Annual return under GST – Requirements, Eligibility, Format and Rules
(https://vjmglobal.com/blog/annual-return-under-gst-requirements-eligibility-format-and-rules/)
19 Frequently Asked Questions (FAQs) (https://vjmglobal.com/blog/gst/19-frequently-asked-
questions-faqs-gst/)
Powered by Contextual Related Posts (https://webberzone.com/plugins/contextual-related-posts/)

Recent Posts
Importance of filling Part B of Eway Bill (https://vjmglobal.com/blog/gst/ewaybill/eway-bill-part-b/)
The Income Tax Will Share ITR Data With GST For Tax Evasion (https://vjmglobal.com/blog/the-
income-tax-department-will-share-itr-data-with-gst-for-tax-evasion/)
INPUT TAX CREDIT UNDER GST|MATCHING|REVERSAL|RECLAIM
(https://vjmglobal.com/blog/gst/itc/input-tax-credit-under-gst-matching-reversal-reclaim/)
(https://web.whatsapp.com/send?phone=+919891576441)
Failure to File GST Return in Time Can Mean Interest On Entire Gross Tax Liability
(https://vjmglobal.com/blog/gst/pay-interest-on-gross-tax-liability-for-late-gst-returns/)
https://vjmglobal.com/blog/export-incentives/duty-credit-scrips-dcs/ 5/7
Order of Utilisation of Input tax
5/21/2019
credit (https://vjmglobal.com/blog/gst/itc/manner-of-utilisation-of-
Duty Credit Scrips | All about Duty credit scrips, its utilisation and benefits

itc/)

(https://vjmglobal.com/

Want to talk to us
Leave your Name, email, Phone number along with what you are looking for in message box or you
can call us at 011-41715118

Name

Email

Phone number

Message

Send

FOR YOU
ABOUT US
Compliance (https://vjmglobal.com/compliance-
About us(https://vjmglobal.com/know-more-about-us-here/)
Calendar calendar)
Our Team(https://vjmglobal.com/our-team/)
Company Law (https://vjmglobal.com/blog/company-law/roc-
Blog(https://vjmglobal.com/blog/)
Compliances compliances/roc-compliances/)
Pay Now
Goods and Service Tax
GST (https://vjmglobal.com/gst-updates-news-notification-
Update circular-order)
GST Notifications & (https://vjmglobal.com/gst-
Circulars notifications)
Income Tax
INDUSTRIES WE SERVES OUR SERVICES

Automotive & Transportation Business set up India


Consumer Products & Retail Direct Taxation
Financial Services Goods and Service tax
Government & Public Sector International Taxation
Health Restructuring services
Life Sciences (https://web.whatsapp.com/send?phone=+919891576441)
Audit and Assurance
Media & Entertainment
https://vjmglobal.com/blog/export-incentives/duty-credit-scrips-dcs/ 6/7
Mining &
5/21/2019Metals Duty Credit Scrips | All about Duty credit scrips, its utilisation and benefits
Oil & Gas
Power & Utilities
Real Estate, Hospitality & Construction
Technology
Telecommunications

(https://vjmglobal.com/

ASK US CONTACT US

Career(https://vjmglobal.com/career/) 405-406, 4th Floor, Raja House, Nehru Place, New Delhi -
Contact Us(https://vjmglobal.com/contact-us) 110019
Terms & Conditions(https://vjmglobal.com/term-condition/) 011-41715118-19 [email protected]
Privacy Policy(https://vjmglobal.com/privacy-policy/) +91 9891576441, 9213397070, 9911887030
(https://www.facebook.com/vjmglobal) (https://twitter.com/vjmglobal) ()

(https://www.youtube.com/channel/UCuJPZZvXm7YBguAhF8aD22w) (https://www.linkedin.com/company/vjmglobal)

Copyright (c) 2014-2019 | All Right Reserved | VJM & Associates LLP

(https://web.whatsapp.com/send?phone=+919891576441)

https://vjmglobal.com/blog/export-incentives/duty-credit-scrips-dcs/ 7/7

You might also like