RoDTEP Scheme: AN OVERview

The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme was set forth by the Government of India (GOI) on 14 September 2019 with an aim to encourage exports. It was issued to allow reimbursement of taxes and duties, which aren’t exempted or refunded through any other scheme in line with the World Trade Organization (WTO) norms.


The RoDTEP scheme is a result of a complaint filed by the USA against India at the WTO. The USA delivered its concern over the export subsidies of GOI through the MEIS Scheme that gave undue benefits to Indian exporters and they claimed it to be against the WTO norms. The case went in favor of the USA at WTO, this indicated a red flag to India’s MEIS Scheme and the requirement to come back with a new WTO compliant scheme to aid the Indian exporters. Thus, the Budget Speech delivered by the Finance Minister on 1st February 2020 declared that a scheme that’ll focus on remission of duties and taxes on export products would be instigated. Consequently, the RoDTEP Scheme sought approvals from the Union Cabinet on 13th March 2020, was implemented from 1st January 2021, and will be adhered to until 2025

What is the RoDTEP Scheme all about?

A refund of embedded state, central, and local duties or taxes wasn’t given to the exporters under any of the existing schemes. Thus, RoDTEP Scheme came into existence. The RoDTEP Scheme for exporters is implemented with a vision to remarkably impact India’s competitiveness in the international market in the upcoming 5 to 10 years. It is introduced to function on the principle that the taxes/duties should be exempted or remitted to exporters instead of being exported.


The product-based percentage has been introduced as per Appendix 4R with the cap (Rs. per UQC). percentage of the RoDTEP is estimated on the basis of the FOB value.

RoDTEP Scheme features

  • As of now, the GST and import customs duties levied on inputs that are needed for manufacturing products to be exported are exempted or refunded in various ways. 

  • Input Tax Credit (ITC) of GST paid can be claimed and if exports are done carried out on payment of duty then IGST refunds are also available.

  • Under the Advance Authorization scheme or the Duty Drawback Scheme, the Import Custom Duties levied on raw materials are exempted.

  • The Central and State governments levy various duties and taxes that aren’t yet refunded. This adds up to the final cost of resultant products making the Indian products uncompetitive in the global market.

The RoDTEP Scheme will enable the exporters to claim a refund of all the hidden taxes and levies. For instance:

  1. For transportation of export products, taxes are levied by the center and state on fuel (petrol, diesel, CNG, PNG, and coal cess, etc.). 

  2. The duty levied on electricity consumption for manufacturing, by the state.

  3. APMCs Mandi tax.

  4. Toll tax and stamp duty for import-export documents.

The RoDTEP Scheme for the exporters will cut down the taxes that previously were exported along with the goods and services. All the indirect Central and State taxes that aren’t refunded under any other scheme will also be covered under the RoDTEP Scheme.

Segments considered under the RoDTEP SchemE

The RoDTEP Scheme would operate within a budgetary framework for every financial year. A 12,400 Cr outlay has been declared for the FY 2021-22.


The scheme exempts certain sectors such as pharmaceuticals, steel, organic and inorganic chemicals as per the latest guidelines.


According to the BVR Subrahmanyam, the commerce secretary to GOI, these sectors are kept out of benefits because of their beneficial performance in the global markets. He further stated that the scheme would regularly review items to include or exclude as per the requirements.


Here’s the list of goods that are ineligible under the RoDTEP Scheme for now:

 

  • Export of imported goods mentioned under paragraph 2.46 of Foreign Trade Policy (FTP).

  • Goods restricted to be exported under “Schedule-2 of Export Policy in ITC (HS)

  • Goods that are banned to be exported underneath “Schedule-2 of Export Policy in ITC (HS).

  • Supplies of products manufactured through DTA units to SEZ/FTWZ units.

  • Export of manufactured goods that have been used.

  • The Exports for which electronic documentation in ICEGATE EDI have not been made.

  • Exported goods claiming to get benefits of notification No. 32/1997- Customs dated 1st April 1997.

  • The goods that are exported from Free Trade Zones (FTZ) or Export Processing Zones(EPZ) or Special Economic Zones(SEZ).

  • The goods obtained or exported through EOU & produced in EHTP and BTP.

  • Deemed Exports.

  • The Export good is limited with a minimum export price or export tax.

  • Products partly or wholly manufactured in a warehouse under section 65 of the Customs Act, 1962 (52 of 1962).

  • Goods exported under Advance License/Special advance license or tax-free import authorization.

Significant Declarations for Shipping Bills to claim RoDTEP Benefits

The exporters must mention whether they intend to claim RoDTEP on the export items from 01/01/2021 or not. However, there won’t be any requirements to specify any separate code or schedule serial number for the RoDTEP scheme for the exporters.

How to apply for the RoDTEP Scheme?

  • The exclusively new RoDTEP Scheme is synonymous with the existing RoSCTL Scheme (Rebate of State and Central Taxes and levies). RoDTEP is an updated version of RoSCTL, indeed.

  • RoSCTL Scheme is, however, only applicable for the made-ups and apparel sectors. 

  • The application will be formed under RoDTEP as being done under RoSCTL.

  • The application has to be filed online using a Class 3 Individual type Digital Signature Certificate on the IECGate website.

  • The necessary shipping bills must be attached with the online application by the applicant.

  • Under the RoDTEP Scheme, the refund will be in the form of duty credit which will be transferable. It can also be in the form of an electronic scrip that will be maintained in the electronic ledger.

The entire process will be pulled out through end-to-end digitization.

How DGFT Guru can assist you?

DGFT Gurus are experts in RoDTEP Scheme consultancy. We have been serving as DGFT Consultancy services for more than thirty years. Our DGFT Advisors do an in-depth study and analysis to figure out all the possible advantages that can be provided to the clients under various government schemes and policies. Our DGFT Advisors are experts in the DGFT Consulting field, they intend to provide you:

 

  • Assistance throughout the documentation process

  • ICEGate registration and Digital signature preparation.

  • Creation of RoDTEP Credit Ledger account.

  • Application on ICEGate in order to validate the benefits under the RoDTEP scheme.

  • Consistent follow-up with Custom and DGFT for the license.


We work towards completing the entire procedure at the earliest, punctuality and DGFT Gurus are synonymous, indeed.

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