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.