RoDTEP stands for Remission of Duties and Taxes on Export Products. It is a new scheme that is applicable with effect from January 1st, 2021, formed to replace the existing MEIS (Merchandise Exports from India Scheme). The scheme will ensure that the exporters receive the refunds on the embedded taxes and duties previously non-recoverable. The scheme was brought about with the intention to boost exports which were relatively poor in volume previously. The US had challenged India’s key export subsidy schemes in the WTO (World Trade Organisation), claiming them to harm the American workers. A dispute panel in the WTO ruled against India, stating that the export subsidy programmes that were provided by the Government of India violated the provisions of the trade body’s norms. The panel further recommended that the export subsidy programmes be withdrawn. This led to the birth of the RoDTEP Scheme, so as to ensure that India stays WTO-compliant
Automated System of Credit
The refund will be issued in the form of transferable electronic scrips. These duty credits will be maintained and tracked through an electronic ledger.
Quick verification through digitisation
Through the introduction of the digital platform, the clearance happens at a much faster rate. Verification of the records of the exporters will be done with the help of an IT-based risk management system to ensure speed and accuracy of transaction processing.
Under RoDTEP, all sectors, including the textiles sector, are covered, so as to ensure uniformity across all areas. Additionally, a dedicated committee will be set up to decide regarding the sequence of introduction of the scheme across the various sectors, what degree of benefit is to be extended to each sector, and such related matters.
The process for the generation and claiming of scrips under the RoDTEP scheme are as follows-
- The exporter should make a declaration of the claim for RoDTEP in the shipping bill.
- Once the Export General Manifest (EGM) is filed, the claim will be processed by the Customs.
- After processing the claim, a scroll with all individual Shipping Bills for the admissible amount will be generated and available in the users account at ICEGATE portal.
- The exporter should log in to the ICEGATE portal and create a RoDTEP credit ledger account.
- After the RoDTEP credit ledger account is created, the exporters can log in to their accounts and generate scrips by selecting the relevant shipping bills.
- Once, the scrips are generated, the refund will be credited and reflected in the exporter’s ledger account and will be available for utilisation in payment of the eligible duties and during imports or for transfer to any other importers.
- Currently, the rate of duty of remission for the products under RoDTEP scheme is not yet notified by the Government of India.
Government has constituted a Committee in the Department of Revenue (DoR) for determination of ceiling rates under the scheme of Remission of Duties and Taxes on Exported Products (RoDTEP). The RoDTEP scheme seeks to refund currently un-refunded (i) duties/taxes/levies at the Central, state and local level, borne on the exported products, including prior stage cumulative indirect taxes on goods and services used in the production of the exported products and (ii) such indirect duties/taxes/levies on distribution of exported product. The degree of benefit to be given under the RoDTEP scheme, within the ceiling rates recommended by the RoDTEP Committee, will be decided by Department of Commerce (DOC). The Sequence of introduction of the scheme across sector and prioritization of the sectors to be covered will be decided by DOC in consultation with DoR.
As per the terms of reference for the RoDTEP Committee, it will interact with identified stakeholders and concerned commodity Councils so as to elicit their views on the ceiling rates under RODTEP scheme. Detailed data (R1,R2 & R3 Format) will be required by the Committee for calculation of ceiling rates under RoDTEP scheme for the identified sector/items. The date required would include details such as inputs used in the manufacturer and distribution of the respective export products, the incidence of un-refunded duties/taxes/levies etc.
Data w.r.t. inputs used in the respective export products in the specified proforma comprising three parts viz. FORMAT R1 R2 & R3 which are required to be filled separately for each export product by a manufacturing/ exporting unit.
While providing the data, care should be taken regarding the following aspects:-
A. Data provided should be complete for the exports made during the period 01.10.2019 to 31.03.2020. for a particular manufactured export item, the details of all input(s) that are used in the manufacture of all types/styles of that particular export items should be indicated.
B. The incidence of duly should be restricted to currently un-refunded (i) duties/taxes/levies at the Central, State and local level, borne on the exported product, including prior stage commutative indirect taxes on goods and services used in the production of the exported product and (ii) such indirect duties/taxes/levies on distribution of exported product. In illustrative list of various duties/taxes/levies that might remains un- refunded is attached as Annexure.
C. It may be ensured that only taxes/levies/duties borne on the exported product which are at present not getting refunded/reimbursed under any other mechanism such as Duty Drawback, GST refunds, Central/State Govt. exemption, subsidy, etc. are taken into account while calculating the tax incidence on the export products.
D. Data submitted should pertain to at least five units for each export product so as to be representative of the industry. The units should be carefully selected from amongst the small, medium as well as large manufacturer exporters.
E. Data Provided should only be of manufacturer exporters in the domestic tariff area and it should be certified by the manufacturer and its Chartered Accountant /Cost Accountant.
F. The Data should be supported by copies of relevant documents such as tax invoices of inputs used, shipping bills of export products. State Govt. notifications regarding taxes/levies like electricity duty, Mandi tax etc.
G. The Data provided should pertain to only those manufacturers/units that are ready to have their records and production processes subjected to inspection by Customs/Central Excise Department if required for the purpose of verifying the correctness of information
Advisory for RoDTEP (Remission of Duties and Taxes on Exported Products) Incentive Scheme can be seen from clicking the Link : https://content.dgft.gov.in/Website/RoDTEP_Advisory.pdf