RoDTEP (Refund of Duties and Taxes on Exported Products) is a flagship export promotion scheme of the Commerce Ministry of India. The scheme aims to refund to the exporters the embedded central, state and local duties and taxes paid on inputs that were so far not refunded or rebated.
The government decided to extend the benefit of the RoDTEP scheme to all goods, with effect from January 1, 2021, according to a notification by the Directorate General of Foreign Trade (DGFT).
RoDTEP was announced in September 2019 with an aim to boost the domestic exports and replace the export incentive scheme Merchandise Exports from India (MEIS) scheme.
This came after a World Trade Organization (WTO) ruling stated that the MEIS scheme violated provisions of the trade agency as it was providing export subsidies for a several range of goods.
RoDTEP scheme details/features
The new export incentive scheme covers 8,555 export items for a cost of around Rs 12,500 crore to the exchequer. The refund rate on 8,555 tariff lines ranges to around 4 per cent of Free on Board (FOB) value. The rebate under the RoDTEP scheme would not be available in respect of duties and taxes already exempted or credited or remitted.
According to DGFT notification, the RoDTEP scheme support will be provided to eligible exporters at a notified rate as a percentage of Freight On Board (FOB) value. Rebates on certain export products will also be subject to a value cap per unit of the exported product.
It will be implemented by Customs through a simplified IT System. Rebates will be issued in the form of a transferable duty credit/electronic scrip (e-scrip) which will be maintained in an electronic ledger by the Central Board of Indirect Taxes and Customs (CBIC).
Employment-oriented sectors like marine, agriculture, leather, gems and jewellery are covered under the scheme. Other segments like automobile, plastics, electrical/electronics, machinery are also getting support under the RoDTEP scheme.
Certain categories, which would not avail the benefits include export goods that are subject to minimum export price, restricted and prohibited items, deemed exports, supplies of goods manufactured by domestic tariff area units to SEZs, and products manufactured or exported by units situated in special economic zones.
