WHAT IS SHIS (Status Holder Incentives Scrip)?

SHIS was designed with intent to promote investment in up-gradation of technology for specified sectors such as leather, textiles, engineering, etc. without the requirement of fulfilment of export obligations.

SHIS scrip was originally issued on actual user condition and not freely transferable. However, the Government has recently permitted transfer of the Duty Scrip to other Status Holder subject to specified conditions.

Status holder shall be entitled to duty credit scrip @ 1% of FOB value of exports done in the specified previous and current financial years. The FOB value of exports could also include up to 12.5% of foreign agency commission for computation of Duty Credit Scrip benefit.

The SHIS scrip can be used for import of capital goods as defined in the FTP.

SHIS scrip can also be used for payment of duties related to import of spares or component of capital goods which were imported earlier. In such cases, utilisation of duty scrip is restricted to the extent of 10% of value of SHIS scrip.

Incentives or Benefits available

By virtue of Customs Notification 104/2009-Cus dated September 14, 2009 Duty Scrip may be used for payment of following duties on import of capital goods by debiting the Duty Scrip at the time of clearance of imported goods or clearance of domestic capital goods.

On Import of Capital Goods:

  • Basic Custom Duty
  • Countervailing Duty
  • Special Additional Duty

Scrip holder may utilise duty scrip for payment of Excise Duty on Indigenous procurement of capital good.

Further, by virtue of Excise notification 33/2012 CE dated July 9, 2012 the Duty Scrip can also be used for payment of Central Excise duty on domestic purchases of Capital Goods by debiting the Duty Scrip.

Availability of CENVAT Credit:

  • Cenvat Credit Rules 2004 permits that a manufacturer would be eligible to take credit of the Customs duties paid under Section 3 of the Customs Tariff Act on import of Capital goods brought into the factory.
  • Para 3.17.6 of FTP 2009-14 specifies that duties under Section 3 of the Customs Tariff Act paid through utilisation of SHIS scrip shall be adjusted as CENVAT Credit or Duty drawback. Thus, an importer shall be entitled to avail Cenvat Credit or duty drawback of CVD and SAD debited through Duty Scrip.

Who can use SHIS Licences?

This Licence can only be utilized by a:

  • Status Holder who is
  • Importing Capital Goods and
  • Is also a manufacturer