The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi, has given its approval on 13th March 2020 for introducing the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP). The Indian Government has come up with a WTO compliant scheme called ‘Remission of Duties or Taxes on Export Products’ (RoDTEP) to replace the present scheme of MEIS & RoSCTL.
RoDTEP Scheme will be announced for a tariff line/ item; the Merchandise Exports from India Scheme (MEIS) benefits or RoSCTL benefits on such tariff line / item will be discontinued from the date the RoDTEP becomes effective.
Under this scheme a mechanism would be created for reimbursement of taxes / duties / levies, at the Central, State and local level, which are currently not being refunded under any other mechanism, but which are incurred in the process of manufacture and distribution of exported products.
This scheme is going to give a boost to the domestic industry and Indian exports thereby providing a level playing field for Indian producers in the International market so that domestic taxes / duties are not exported.
Under the Scheme an inter-ministerial Committee will determine the rates and items for which the reimbursement of taxes and duties would be provided.
Refund under the Scheme, in the form of transferable duty credit / electronic scrip will be issued to the exporters, which will be maintained in an electronic ledger. The Scheme will be implemented with end to end digitization.
The refunds under the RoDTEP scheme would be a step towards “zero-rating” of exports.
GST and customs duties on inputs required to manufacture exported products are either exempted or refunded. However, certain taxes / duties / levies are outside GST, and are not refunded for exports, such as, VAT on fuel used in transportation, Mandi tax, duty on electricity used during manufacturing etc. These would be covered for reimbursement under the RoDTEP Scheme.
The sectors to be covered and extent of benefit to be given on various items are yet to be notified by the Department of Commerce (DoC) in consultation with Inter-Ministerial Committee.
The rebate would be claimed as a percentage of the freight on board (FOB) value of exports.
A monitoring and audit mechanism, with an information technology based risk management system (RMS), would be put in place to physically verify the records of the exporters.
Decrease in credit interest rates to MSMEs.
Increase in loan availability for exporters introduced through ECG acting as guarantee for loans availed.
A budget to provide higher insurance cover through Export Credit Guarantee Corporation (ECGC), to increase the lending opportunities from banks.
Reduction in turnaround time on airports and ports to decrease delays in exports. A real time monitoring of clearance status via digital platform will be made available.
1. Whether RoDTEP will be over and above the existing reward or will it replace any of the existing reward.
Ans. RoDTEP will replace the existing MEIS and RoSCTL benefits.
2. Whether rate of RoDTEP is notified or yet to be notified.
Ans. Rate of RoDTEP is yet to be notified but the scheme and roadmap have been approved by the Cabinet under chairmanship of Hon’ble Prime Minister.
3. What is the rate of subsidy for RoDTEP ?
Ans. The rates are yet to be decided in the new RoDTEP Scheme for various goods, but rates for garment and made-ups have been notified under RoSTCL.
4. How long will the Scheme be in effect ?
Ans. RoDTEP will be in effect till 2025 or until a new scheme comes in to replace it. Entire merchandise exports of India will be subsidized through this Scheme.