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Overview of Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme

The RoDTEP Scheme is a new scheme, and it is applicable from 1st January 2021 by replacing the Merchandise Exports from India Scheme (MEIS). It ensures that the exporters receive refunds on the embedded taxes and duties previously non-recoverable. This Scheme was introduced with the intention to boost the exports as it was relatively inferior in volume previously.

A dispute panel in the WTO gave a ruling against India that the export subsidiary programmes provided by the Indian Government violated the provisions of the trade body' norms when the US lodged a complaint against India's MEIS schemes in WTO. The panel also recommended that such export subsidiary programmes should be withdrawn. This ultimately gave birth to the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to ensure that the Indian Government is complying with the WTO recommendation.

Under this Scheme, all sectors are covered to ensure uniformity across all areas. The refund issued is in the form of transferable electronic scrips, and these duty credits are maintained and tracked through an electronic ledger.

The Government has established a Committee in the Department of Revenue (DoR) to the determination of ceiling rates under this Scheme. The Scheme seeks to refund the following currently unrefunded:

  • Duties, taxes or levies at the Central, State and local level, borne on the exported products, including prior stage cumulative indirect taxes on services and goods used in the production of exported products
  • Such indirect duties, taxes or levies on the distribution of the exported product.

This Scheme leads to the cost competitiveness of exported products in international markets and better employment opportunities in export-oriented manufacturing industries.

Some of the export subsidy programmes recommended to be withdrawn are as follows:

  • Merchandise Exports from India Scheme
  • Export Oriented Units Scheme
  • Electronics Hardware Technology Park Scheme
  • Bio-Technology Park Scheme
  • Export Promotion Capital Goods Scheme
  • Special Economic Zones (SEZ) Scheme
  • Duty-free Imports for Exporters Scheme

This Scheme aims to refund all the hidden taxes and levies, such as the followings:

  • Central taxes and State taxes on the fuel used for transportation
  • A duty levied by the state on electricity used for manufacturing
  • Mandi tax levied by APMCs
  • Toll tax and stamp duty on the import-export paper works

This Scheme ensures that the exporter only exports goods and services, not any kind of taxes, and this Scheme covers all indirect taxes that are not reimbursed in any existing scheme.

Benefits of the RoDTEP Scheme

Benefits provided under the RoDTEP Scheme to the exporter are as follows:

Timely adoption of industry standards

Indian exporters are now able to meet international standards for exports. It helps increase the country's economy and the working capital of the businesses.

New working group on standards

Ministry of Finance has established/constituted a working group on standards that lays down the roadmap for standard adoption, enforcement and timelines. It provides support to exporters in case of non-tariff barriers such as slow testing and export clearance process.

  • Affordable testing and certification
  • Exporters are now able to avail of affordable testing and certification to get affordable Indian certifications rather than relying on any international organisation. The testing and certification services have developed in public and private partnership mode to assist exporters of India in getting access to an internationally recognised test.
  • Quicker GST Returns

The tax assessment will get fully automatic for Indian exporters, and businesses will access their refund through an automatic refund route.

Less turns around time at airports and ports.

The Ministry of Finance has minimised the clearance time at airports and ports to decrease delays in exports. Exporters are now able to monitor real-time clearance status through a digital platform.

Financial benefits

Exporters are set to enjoy lower rates of interest on capital loans and other financial benefits such as higher insurance cover and financial incentives on exports.

Eligibility for Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme

The eligibility criteria for obtaining the benefit of the RoDTEP Scheme are as follows:

  • All sectors, including the textile sector
  • Labour-intensive sectors are given priority
  • Manufacturers and merchant exporters (traders) are eligible
  • No particular turnover threshold to claim RoDTEP
  • Exported products need to have India as their country of origin
  • Special Economic Zone and Export Oriented Units
  • When goods are exported via courier through e-commerce platforms

The following are illegible categories or suppliers for this RoDTEP Scheme:

  • Export of imported goods that fall under the Foreign Trade Policy.
  • Export through transhipment (exports originating in a third country)
  • Export products which are limited/subject to Minimum export price or export duty
  • Products which are restricted for export under schedule 2 of Export Policy in ITC (HS)
  • Products which are prohibited for export under Schedule 2 of Export Policy in ITC (HS)
  • Deemed exports
  • Supplies from DTA to SEZ/FTWZ
  • Products manufactured in EHTP and BTP
  • Products manufactured partly or wholly in the warehouse as provided in Section 65 of the Customs Act
  • Products that are manufactured or exported in discharge of export obligations against Advance Authorisation or DFIA
  • Products manufactured or exported by EOU
  • Products manufactured or exported by SEZ, FTZ or EPZ
  • Products manufactured or exported availing benefits of Notification no. 32/1997-Customs dated 1st April 1997
  • Exports from non-EDI port
  • Goods are taken into use after manufacture

Documents Required for Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme

Documents required to apply for RoDTEP Scheme are as follows:

  • Shipping bills
  • Electronic Bank Realisation Certificate (e-BRC)
  • Class 3 DSC
  • Registration Cum Membership Certificate (RCMC)
  • IEC (Import-Export Code)
  • Aadhar Card
  • PAN Card
  • Authorisation Letter
  • Declaration

Procedure for Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme

Following are the steps to be followed:

  • It is mandatory for exporters to declare their intention to claim this RoDTEP on the exported items in their shipping bills.
  • When the Export General Manifest (EGM) is filed, the declaration is processed by customs.
  • After processing the declaration of claim, a scroll with every individual shipping bill for the admissible quantity is generated.
  • The exporter has to create a RoDTEP credit ledger and generate scrips by choosing relevant delivery bills.
  • After the scrip is generated, the refund is credited and pondered in the exporter ledger and is available for utilisation in the fee of the eligible responsibilities and during import or for transfer to another importer.

Frequently Asked Questions

Merchandise Exports from India Scheme, also known as MEIS, was a scheme designed to grant rewards to exporters to offset infrastructural inefficiencies and the associated costs. MEIS came into effect on 1st April 2015 through the Foreign Trade Policy (FTP). The Ministry of Commerce and Industry implemented MEIS, and it was considered a major export promotion initiative by the Government of India. But the US challenged this as a violation of international norms, and so the Government of India withdrew it.

On 1st January 2021, the India Government withdrew the MEIS via the Directorate General of Foreign Tarde (DGFT).

MEIS Scheme used to generate or issue physical scrip, while RoDTEP Scheme generates electronic scrip.

The objectives of this Scheme are as follows:
  • To boost all export schemes for enhancing exports to international markets.
  • To make Indian exports cost more competitive and to create a level playing field for all Indian Exporters in the International market.
  • To give a push to employment generation in various sectors.
  • To boost dwindling outward shipments.

The benefits of RoDTEP, i.e., e-scrips, are utilised for payment of duty of Customs, only that is leviable under the First Schedule to the Customs Tariff Act, 1975, meaning only Basic Customs Duty and not for payment of any other taxes like IGST, Compensation cess, etc. upon import of goods.

The RoDTEP Scheme is implemented through digitisation of the rebate amount in the form of transferable duty credit scrip. This scrip is maintained in an electronic ledger by CBIC for its utilisation.

Currently, the pharmaceuticals, steel, organic and inorganic chemicals, etc., sectors are excluded from the benefit of the RoDTEP Scheme.

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