RoDTEP

Overview

RoDTEP (Remission of Duties and Taxes on Exported Products) is a new scheme introduced by the Government of India to replace the existing Merchandise Exports from India Scheme (MEIS) to incentivize exports. The RoDTEP scheme will reimburse the duties and taxes incurred on inputs used in the manufacture of exported products.

The necessity for the RoDTEP Scheme arose when the United States contested several of India’s principal export subsidy schemes at the WTO (World Trade Organisation), alleging they were detrimental to American workers. The WTO’s dispute panel decreed that India’s export subsidies contravened the organization’s regulations. Consequently, it was advised that these subsidies be rescinded. The establishment of the RoDTEP Scheme was a direct response to maintaining India’s adherence to WTO rules.

Features of RoDTEP:

1. RoDTEP will be applicable for both goods and services exports.
2. The scheme will cover all indirect taxes, such as excise duty, GST, and other levies that are not refunded under any other existing scheme.
3. The reimbursement of taxes and duties will be provided through a digital scrip, which can be used for paying customs duty or transferred to another person.
4. The rates for RoDTEP will be fixed by the government and will vary according to the product category and the country of export.
5. The scheme will be implemented from 1st January 2021.

Requirements for RoDTEP:

1. Exporters must have a valid IEC (Import Export Code) registration.
2. The exporter must have a bank account and PAN number.
3. The exporter must be GST compliant and must have filed all GST returns.
4. The exporter must provide necessary documents such as invoices, shipping bills, and other supporting documents to claim RoDTEP benefits.

Documents required for RoDTEP:

1. Export invoices and shipping bills.
2. GST returns filed for the relevant period.
3. Bank account details of the exporter.

Benefits of RoDTEP:

1. RoDTEP will help in boosting the competitiveness of Indian exports by reducing the embedded taxes and duties in the exported products.
2. The scheme will promote exports of products that have high import content.
3. It will provide a level playing field for Indian exporters in the global market.
4. The scheme will help in improving the cash flow of exporters by providing timely reimbursement of duties and taxes paid on inputs.

The export subsidy programs suggested for elimination

• Merchandise Exports from India Scheme
• Export Oriented Units Scheme
• Electronics Hardware Technology Parks Scheme
• Bio-Technology Parks Scheme
• Export Promotion Capital Goods Scheme
• Special Economic Zones (SEZ) Scheme
• Duty-Free Imports for Exporters Scheme

Attributes of the RoDTEP Scheme

Reimbursement of previously irrecoverable taxes and duties Taxes and duties like Mandi tax, VAT, Coal cess, and Central Excise duty on fuel, which were earlier non-refundable, are now reclaimable under this scheme. The RoDTEP Scheme now encompasses all commodities previously under MEIS and RoSTCL (Rebate of State and Central Taxes and Levies).

Automated credit mechanism Refunds are processed as transferable electronic scrips, managed within an electronic ledger for efficient tracking.

Expedited digital verification The adoption of a digital platform accelerates clearance processes. Exporters’ records are swiftly verified using an IT-based risk management system, enhancing the speed and precision of transactions.

Inclusive multi-sectoral coverage The RoDTEP Scheme extends to every sector, including textiles, to maintain consistency across industries. A specialized committee will determine the implementation order, the extent of benefits for each sector, and related issues.

Criteria for the RoDTEP Scheme benefits

Universal sectoral inclusion Every sector, textiles included, is entitled to the RoDTEP Scheme’s advantages. Sectors that are labor-intensive and beneficiaries under the MEIS Scheme will receive precedence.

Eligibility for manufacturers and merchants Both manufacturer exporters and merchant exporters (traders) qualify for this scheme’s advantages.

No minimum turnover requirement The RoDTEP can be claimed without any specific turnover threshold.

Exclusions for re-exported goods Goods that are re-exported do not fall under this scheme’s eligibility.

Indian origin requirement For a product to qualify, it must originate from India.

SEZ and EOU inclusion Special Economic Zone Units and Export Oriented Units can also claim this scheme’s benefits.

E-commerce exports coverage Products exported through courier on e-commerce platforms are also covered by the RoDTEP Scheme.

Accessing RoDTEP Scheme

ICEGATE Portal Documentation: The ICEGATE portal (Indian Customs Electronic Gateway) documents the credits that exporters have utilized. Exporters must detail their RoDTEP benefit claims for specific export items on the shipping bill at the port and generate a corresponding credit scrip.

Credit Scrips Usage These scrips serve to settle basic customs duties, secure rebates, or be transferred to other importers as needed.

Scrip Generation and Claiming Procedure

• Exporters declare their RoDTEP claim on the shipping bill.
• Following the filing of the Export General Manifest (EGM), Customs processes the claim.
• A scroll listing all individual Shipping Bills with the eligible amount is then generated in the user’s ICEGATE account.
• Exporters must create a RoDTEP credit ledger account on the ICEGATE portal.
• With the account set up, exporters can generate scrips by selecting appropriate shipping bills.
• Once generated, the scrips’ value is credited to the exporter’s ledger account, ready for duty payments during imports or for transfer to other importers.
• The duty remission rate for products under the RoDTEP scheme is pending announcement by the Government of India.

To utilize the RoDTEP Scheme benefits:

ICEGATE Portal Records Details of credits utilized by exporters are maintained in the ICEGATE portal (Indian Customs Electronic Gateway). At the port, exporters are required to specify in the shipping bill the RoDTEP benefit claims for specific export items and create a credit scrip.

Utilization of Credit Scrips These scrips can be applied towards the payment of basic customs duties, to claim rebates, or they may be transferred to other importers.

Procedure for Scrips

• Exporters must declare their RoDTEP claim within the shipping bill.
• The claim is processed by Customs once the Export General Manifest (EGM) is filed.
• A scroll is generated post-claim processing, listing all Shipping Bills with the eligible amount, accessible in the user’s ICEGATE account.
• Exporters should establish a RoDTEP credit ledger account via the ICEGATE portal.
• Upon creating the account, exporters can generate scrips by selecting the relevant shipping bills.
• The generated scrips’ refund is then credited to the exporter’s ledger account, available for duty payments during imports or for transfer to other importers.
• The duty remission rate for RoDTEP scheme products awaits notification by the Government of India.

Comparison of MEIS and RoDTEP:

MEIS (Merchandise Exports From India Scheme)

• Provides incentives for exported goods.
• Does not align with WTO standards.
• Offers 2%-5% on the FOB value of exports.
• Delivers incentives as physical, transferable scrips.

RoDTEP (Remission of Duties and Taxes on Exported Products)

• Ensures refunds for duties and taxes not covered by other schemes.
• Adheres to WTO regulations.
• The percentage of benefits based on products is pending announcement.
• Issues incentives as transferable duty credits or electronic scrips, tracked via an electronic ledger.