RoDTEP Scheme for EOU, AA Holders, and SEZ Units: Benefits until September 2024

The Government of India released notification no. 70/2023 dated 8th March 2024 to extend its support for the Export Oriented Units (EOU), Special Economic Zones (SEZs), and Advance Authorisation holders.  This extension will be effective from 11th March 2024 to 30th September 2024. 

Nevertheless, Manufacturing and Other Operations in a Customs Bonded Warehouse (MOOWR) continue to be exempted from this assistance and advantage. 

Let’s get some details regarding the RoDTEP Scheme and understand how exporters and importers will benefit from this.

RoDTEP, which stands for Remission of Duties and Taxes on Export Products, has replaced the previous MEIS (Merchandise Exports from India Scheme). This initiative guarantees that exporters receive refunds on the embedded taxes and duties that were previously non-recoverable.

The RoDTEP scheme is implemented to neutralise the taxes and duties incurred on exported goods, which would otherwise not be credited, remitted, or refunded in any manner. The benefits are provided as a percentage of Free on Board (FOB) value or a fixed amount per unit of measurement as specified in Appendix 4R to the Notification.

The RoDTEP Scheme aims to cover the compensation of duties, taxes, and levies incurred at the Central, State, and Local levels on exported products. This includes prior-stage cumulative indirect taxes on goods and services utilised in the production and distribution of the exported product, such as:

• Value Added Tax (VAT) and Excise duty on fuel used in self-incurred transportation costs, electricity generation via power plants or DG Sets, and running of machinery/plant.
• Electricity duty on purchased electricity.
• Mandi Tax, Municipal Taxes, and Property Taxes.
• Stamp duty on export documents.
• Un-creditable Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Integrated Goods and Services Tax (IGST), and Compensation Cess on items falling under categories like passenger transportation vehicles, food and beverages, rent-a-cab, and works contract services.

The following are the categories which are ineligible to claim benefits under RoDTEP scheme:

• Exports of goods imported under the “Import for Export” provision according to paragraph 2.46 of the Foreign Trade Policy (FTP).
• Exports facilitated through transhipment, indicating goods originating in a third country but passing through India.
• Exported products subjected to minimum export price or export duty.
• Goods restricted for exports as per Schedule 2 of the Export Policy in the Indian Trade Classification (Harmonised System) [ITC (HS)].
• Goods prohibited for exports under Schedule 2 of the Export Policy in the ITC (HS).
• Deemed exports.
• Supplies of products manufactured by units in the Domestic Tariff Area (DTA) to Special Economic Zone (SEZ) or Free Trade Warehousing Zone (FTWZ) units.
• Goods manufactured in Electronics Hardware Technology Park (EHTP) and Bio-Technology Park (BTP).
• Goods manufactured wholly or partially in a warehouse under section 65 of the Customs Act, 1962, such as Manufacturing and Other Operations in a Warehouse (MOOWR), etc.
• Goods manufactured or exported to fulfil export obligations under Advance Authorisation, Duty-Free Import Authorisation (DFIA), or special Advance Authorisation issued under relevant FTP duty exemption schemes.
• Goods manufactured or exported by 100% Export Oriented Units (EOUs).
• Goods manufactured or exported by units located in Free Trade Zones (FTZs), Export Processing Zones (EPZs), or Special Economic Zones (SEZs).
• Goods manufactured or exported benefiting from Notification No. 32/1997-Customs (e.g., jobbing transactions).
• Exports without electronic documentation generated in the Indian Customs Electronic Data Interchange (ICEGATE EDI) or from non-EDI ports.
• Goods put into use after manufacture (i.e., second-hand goods).

The ICEGATE portal, which serves as the Indian Customs Electronic Gateway, contains information on credits utilised by exporters. When exporting, the exporter must declare RoDTEP benefit claims for specific items in the shipping bill and generate a credit scrip accordingly. These scrips can pay basic customs duties, claim rebates, or transfer to other importers.

The process for generating and claiming scrips under the RoDTEP scheme is as follows:

• The exporter declares the RoDTEP claim in the shipping bill.
• Upon filing the Export General Manifest (EGM), Customs processes the claim.
• After processing, a scroll containing individual Shipping Bills with admissible amounts is generated and accessible in the user’s ICEGATE portal account.
• The exporter creates a RoDTEP credit ledger account on the ICEGATE portal.
• Once the RoDTEP credit ledger account is established, exporters can log in and generate scrips by selecting relevant shipping bills.
• Upon generating the scrips, refunds are credited to the exporter’s ledger account and can be utilised for eligible duties during imports or transferred to other importers.

To claim the credit and generate e-credit scrips on the online ICEGATE Portal, follow these steps:

Step 1: Navigate to the Escrip Home Page and select the SB Details Tab for scrip generation.

Step 2: Choose the Shipping bills/scrolls for which the scrips are needed. Select RoSCTL or RoDTEP under the scheme name and location.

Step 3: An error message will appear if the scheme is not selected.

Step 4: View and select the shipping bills, then click on the “Generate Scrip” button to create the scrip. You can select all shipping bills at once by checking the box in the first row.

Step 5: After successful Scrip Creation, a confirmation message will appear on the screen stating: “Scrip No.: XXXXXXXXXX has been generated successfully.”

The RoDTEP scheme’s extension until September 2024 offers vital assistance to EOUs, Advance Authorisation Holders, and SEZs, streamlining their export endeavours. 

Familiarising oneself with the eligibility standards, perks, and procedures for accessing RoDTEP benefits empowers exporters to enhance their export activities and capitalise on the scheme’s advantages for enduring expansion. 

Nonetheless, exporters must remain vigilant regarding any future alterations or updates to the scheme to adhere to regulations and optimise benefits.