Scheme for remission of duties and taxes on exported products (RoDTEP)

To boost exports from India, by allowing refund of taxes that are not hitherto refunded or available as credit, the Government of India notified RoDTEP to replace the Merchandise Exports from India Scheme. The scheme has been made effective from 1st Jan 2021.

Scheme’s Objective and Operating principles

• To expand the ambit of duties which are currently unrefunded: Duties, taxes and levies borne on the exported product at the central, state and local levels, including prior-stage incidence of such duties, taxes and levies on goods and services used in the production of the exported product and its distribution. However, rebate is not available in respect of duties and taxes that have already been exempted or remitted or credited.
• Ceiling rates of rebate for products to be dealt by a committee in the Department of Revenue/Drawback Division with suitable representation of the Department of Commerce (DoC) and DGFT and line ministries and experts.
• The overall Budget would be finalized by the ministry of finance in consultation with DoC.
• RoDTEP will operate in a budgetary framework as approved by both, the Ministry of Finance and DOC for each FY, necessary revisions will be made to the scheme benefits as and when required. The remission of arrears or contingent liabilities is not allowed to be carried over to the next FY.

Guidelines and rates are expected to give relief to trade that was awaited since January 2021. Hopefully, the benefit will further support and boost exports. The inclusion of exports against Advance Authorization, EOUs and SEZs in the future will hopefully help the exporters using these schemes to also optimize the tax costs.

• The sequence of introduction across sectors, prioritization of the sectors to be covered and degree of benefit to be given on various items within the rates set by the committee and within the ceiling as may be prescribed on the per item or total overall benefit amount.
• The refund will be granted at a notified rate as a percentage of FOB value with a value cap per unit of the exported product in specific cases or a fixed rate per unit, as may be notified. The rates will form part of Appendix 4 R of the Foreign Trade Policy 2015-20. Some illustrative rates for key products are listed below as annexure.
• The restricted category for the scheme includes, deemed exports (DTA to SEZ/FTWZ), supplies by SEZ/ EOU/ FTWZ/ bonded warehouse u/s 65 of Customs Act, supplies under Advance Authorization.
• The rebate allowed is subject to the receipt of sale proceeds with the prescribed time limit in terms of the Foreign Exchange Management Act, 1999, failing which such rebate is deemed to have not been allowed.
• RoDTEP will be operationalized through end-to-end digitization in the form of a transferable duty credit or electronic scrip (e-scrip), which will be maintained in an electronic ledger by the CBIC.