The High Court of Bombay High (HC) in Naman Hotels Pvt. Ltd. v
Union of India has held that only 'Indian Brands' are
eligible to claim export incentive under the 'Served from India
Scheme' (SFIS) notified in Chapter 3 of the Foreign Trade
Policy 2009 – 2014.
The issue before the HC was whether export of services under a
pre-eminent foreign brand would be eligible to claim benefit under
SFIS. Analyzing the issue, the HC noted that the objective behind
SFIS was to accelerate growth and create a unique 'served from
India brand' by 'Indian Service Providers'.
Consequently, only those exports which result in creation of a
unique and distinct 'Indian brand' created by / through
'Indian Service Providers' would be covered in SFIS. Mere
utilization of a pre-existing foreign brand for service exports
from India would not qualify as 'Indian Brand' or
'Indian Service Providers' and hence, would not be eligible
to claim benefits under SFIS.
This judgment is in direct conflict with the Delhi High Court
decision in Yum Restaurants (I) Pvt. Ltd. v Union of India.
This judgment will not have any impact on the export incentive
under the 'Service Exports from India Scheme' (SEIS)
notified under the new Foreign Trade Policy 2015 – 2020
(FTP). Under SEIS, export incentive are extended to 'Service
Providers located in India' and not limited to 'Indian
Service Providers'. Further, SEIS does not refer to any
'India brand' and therefore, as long as service has been
provided by persons located in India even though under foreign
brand would be eligible to claim export incentive under SEIS.
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