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A new scheme, RoDTEP (Remission of Duties and Taxes on Exported Products) has been launched by the government for exporters wef 1st January 2021. The scheme provides for rebate of Central, State and Local duties/taxes/ levies which are not refunded under any other duty remission schemes. The broad provisions are as under:

I. To avail the scheme exporter shall make a claim for RoDTEP in the shipping bill by making a declaration.

II. Once EGM is filed, claim will be processedby Customs.

III. Once processed a scroll with all individual Shipping Bills for admissible amount would be generated and made available in the users account at ICEGATE,

IV. User can create RoDTEP credit ledger account under Credit Ledger tab. This can be done by IECs who have registered on ICEGATE with a DSC.

V. Exporter can log in into his account and generate scrip after selecting the relevant shipping bills.

What is RoDTEP Scheme?

RoDTEP scheme is notified for the remission of duties, taxes and other levies at the Central, State and local level which are borne on the exported goods manufactured in India. It also include incidence of taxes suffered post manufacturing of the goods i.e. in respect of the distribution of exported goods.

The benefit is not available in respect of those duties or taxes which are otherwise exempted or remitted or credited.

The benefit is given as percentage of FOB or fixed amount per unit of measurement as prescribed in the Appendix 4R to the Notification.

Governing regulatory bodies for the RoDTEP in India

  • RoDTEP scheme is notified by the Department of Commerce.
  • The Scheme shall be fully administered by the Department of Revenue.
  • A separate committee has been constituted comprising of Department of Revenue with suitable representation of the Department of Commerce/DGFT, line ministries and experts on the prioritized sectors. The committee shall be responsible for the determination of rge ceiling rates under the Scheme.
  • Further, a separate RODTEP Policy Committee (RPC) chaired by DGFT would be constituted to address residual issues related to the Scheme.

Difference between RoDTEP Scheme and MEIS Scheme

Basis

MEIS Scheme

RoDTEP Scheme

FTP

Benefit given as export incentive under FTP

Benefit given as duty exemption and remission scheme under FTP

Products

Almost all the products were covered under MEIS benefit.

There are few sectors i.e. pharmaseuticals, chemical, steel etc. are important sectors which have not been covered in the Scheme.

Benefit

The average rate of benefit under MEIS was between 2% to 7*%

*Enhanced rate

The benefit ranges between0.01 to 4.3% of FOB. However, in majority of the products, benefit under RoDTEP is substantially lower (may be less than 50%) than MEIS benefit.

Restriction

MEIS was broad based scheme which was available to SEZ, EOU, MOOWR, advance authorization holder etc.

RoDTEP is very restrictive and SEZ, EOUs, advance authorization holders, MOOWR etc have been covered in the ineligible categories with an option for some of these to confer benefit in future.

Country specific

The quantum of benefit depended upon the country of exports. Exports to some of the countries were not entitled for benefit.

There are no country specific restrictions. Exports to all the Countries are covered in the Scheme benefit.

Net impact

The benefit under MEIS for majority of sector was significant compared to RoDTEP and helped a lot to exporters to become competitive in the international market.

The benefit under RoDTEP is very restrictive and, in many sectors, may have adverse impact on the export competitiveness of the Indian Exporters.

 

Which taxes are intended to be compensated to the exporters in RoDTEP Scheme?

The scheme intends to compensate the duties/taxes/levies at the Central, State and Local level borne on the exported product including prior stage cumulative indirect taxes on goods and services used in the production and distribution of the exported product.

Illustrative taxes would be as follows:

  • VAT and Excise duty on the fuel (5 goods) used in self-incurred transportation costs;
  • VAT and Excise duty on the fuel used in generation of electricity via power plants or DG Sets;
  • VAT and Excise duty on the fuel used in running of machineries/plant;
  • Electricity duty on purchase of electricity;
  • Mandi Tax/ Municipal Taxes/ Property Taxes;
  • Stamp duty on export documents;
  • Un-creditable CGST/ SGST/ IGST/ Compensation Cess on items falling under Section 17 (5) [passenger transportation vehicles, food and beverages, rent-a-cab, works contract services, etc.]
  • Un-creditable CGST/ SGST/ IGST/ Compensation Cess which normally gets lost due to defaults by suppliers, e.g. GSTR 2A default, Section 16 (2) default, Section 16 (4) default

Ineligible categories under RoDTEP Scheme for claiming benefit

Following are ineligible categories:

(i) Exports of imported goods as per para 2.46 of FTP i.e. Import for Export

(ii) Exports through transhipments, meaning exports originating in third country but transshipped through India

(iii) Export products subject to minimum export price or export duty

(iv) Products restricted for exports under Schedule 2 of Export Policy in ITC (HS)

(v) Products prohibited for exports under Schedule 2 of Export Policy in ITC (HS)

(vi) Deemed Exports

(vii) Supplies of products manufactured by DTA units to SEZ/FTWZ units

(viii) Products manufactured in EHTP and BTP

(ix) Products manufactured partly or wholly in a warehouse under section 65 of Customs Act, 1962 (i.e. MOOWR etc)

(x) Products manufactured or exported in discharge of export obligation against advance authorisation or DFIA or special advance authorisation issued under a duty exemption scheme of relevant FTP

(xi) Products manufactured or exported by 100% EOU

(xii) Products manufactured or exported by any of the units situated in FTZ, EPZ or SEZ

(xiii) Products manufactured or exported availing the benefit of Notification No 32/1997- Customs (i.e. jobbing transactions)

(xiv) Exporrs for which electronic documentation in ICEGATE EDI has not been generated or exports from Non EDI port

(xv) Goods which have been taken into use after manufacture (i.e. second hand goods)

rodtep scheme

Guidelines and Rates notified for RoDTEP Scheme

Centre has today notified RoDTEP Scheme Guidelines and Rates (Remission of Duties and Taxes on Exported Products). The rates of RoDTEP will cover 8555 tariff lines....