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Remission of Duties and Taxes on Exported Products Scheme

Context:

Recently, the central government has extended export benefits under the RoDTEP scheme to 18 items related to the textiles sector, including saari and lungi, intending to boost shipments of these goods.

Relevance:

GS-III: Indian Economy (Growth and Development of Indian Economy, Taxation)

Dimensions of the Article:

  1. Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme
  2. Extension of the RoDTEP
  3. RoDTEP Benefits

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

  • The RoDTEP Scheme allows exporters to receive refunds on taxes and duties that are not exempted or refunded under any other scheme.
  • Under the scheme, exporters receive refunds on the embedded taxes and duties previously non-recoverable.
  • The chief aim of the scheme is to boost the export of goods that were poor in volume.
  • The scheme basically replaces the Merchandise Export from India Scheme (MEIS).
  • The scheme provides for rebates of Central, State and Local duties/taxes/ levies which are not refunded under any other duty remission schemes.
  • The RoDTEP scheme can be said to be a combination of the MEIS and the Rebate of State and Central Taxes and Levies (RoSCTL).
  • Under this scheme, refund would be claimed as a percentage of the Freight On Board (FOB) value of exports. 
Features of RoDTEP Scheme
  • It covers duties and taxes levied at the central, state and local levels that are not reimbursed under any other mechanism. Items that were under the MEIS and the RoSCTL are shifted to the RoDTEP.
  • Refunds will be issued to exporters as transferable duty credit/electronic scrips and maintained in an electronic ledger. This is keeping in line with the Digital India mission. This can be used to pay basic customs duty on imported goods. The credits can also be transferred to other importers.
  • Faster clearance through a digital platform will be facilitated through a monitoring & audit mechanism, with an IT-based risk management system that would physically verify the exporters’ records.
  • The scheme is applicable across all sectors.

Extension of the RoDTEP

  • In January 2021, the Government has decided to extend the benefit of the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) to all export goods. (Initially, the scheme was expected to be limited to around three sectors to start with due to limited resources.)
  • In August 2021, the Government notified the rates and norms for the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, while asserting that it would put some ‘direct cash in the pockets of exporters’ soon.
  • This move means that Indian exporters will be able to meet the international standards for exports as affordable testing and certification will be made available to exporters within the country instead of relying on international organizations.

RoDTEP Benefits

  • Being WTO-compliant, the RoDTEP scheme can make available from the government benefits to the exporters seamlessly.
  • The scheme is more exhaustive in that certain taxes that were not covered under the previous scheme are also included in the list, for example, education cess, state taxes on oil, power and water.
  • It will add more competitiveness in the foreign markets, with assured duty benefits by the Indian Government.
  • It will also help exporters meet international standards and promote business growth.
  • Also under RoDTEP, tax assessment is set to become fully automatic for exporters, hence, Businesses will get access to their refunds for GST via an automatic refund-route.

-Source: The Hindu


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