The Bombay High Court has allowed the benefit of Services Exports from India Scheme (SEIS) in a case where the exporter had no valid Importer Exporter Code (IEC) number at the time of rendering export of services.
The Court in this regard observed that the eligibility criteria incorporated in para 3.08(f) of the Foreign Trade Policy (condition of having an active IEC number at the time of rendering services for claiming reward) was inconsistent with Section 7 of the Foreign Trade (Development and Regulation) Act.
The Court reiterated that by way of delegated legislation i.e. the Foreign Trade Policy, additional rights or obligations cannot be imposed.
The High Court in Smarte Solutions Pvt. Ltd. v. Union of India [Judgement dated 27 July 2022], for this purpose, noted that the proviso to Section 7 of the FTDR Act does not lay down that the IEC number is essential at the time of rendering services. It noted that IEC number was necessary only when the service provider is taking the benefits under the FTP.
The petition was allowed with direction to the DGFT/Regional Authorities to consider the petitioner’s application without insisting for an active IEC number at the time of rendering services.