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Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP)

Scheme for Remission of Duties and Taxes on Exported Products (RODTEP) was launched in 2020 from 1st January 2021 through the ministry of commerce and industry Govt. of India. This scheme is applicable to the export of products but not services. This scheme was enforced to repeal and reduce taxes for exported products and thereby encouraging the conditions of exported and increasing the amount of export in the country. This scheme has replaced Merchandise export incentive schemes (MIES).

OBJECTIVE

The RODTEP scheme was launched with the view 

  1. To encourage exports in the country by reducing duties 
  2. To provide easy refunds of various taxes to the exporters 
  3. To provide an automatic refund route for ITC for avoiding the cascading effect of taxes.
  4. To help exporters in meeting international export standards

ELIGIBILITY OF THE SCHEME

This scheme is applicable to all the sectors involved in the export of goods irrespective of their turnover. Provided the country of manufacturing of the exported goods should be in India. However, labour – intensive industries should be given more priority over other sectors. Goods exported through e-commerce platforms are also eligible under this scheme.

INELIGIBLE SECTORS UNDER RoDTEP

  • Re-Export of imported goods where the originating country is the third country
  • Export products that are subject to Minimum export price or export duty
  • Deemed Exports
  • Supplies of products manufactured by Domestic Trades Areas (DTA) units to SEZ/FTWZ units
  • Products manufactured in EHTP and BTP
  • Products manufactured or exported by a unit licensed as a hundred percent Export Oriented Unit (EOU) in terms of the provisions of the Foreign Trade Policy
  • Products manufactured or exported by any of the units situated in Free Trade Zones or Special Economic Zones (SEZ)
  • Exports for which electronic documentation in ICEGATE EDI has not been generated/ Exports from non-EDI ports

PROCESS OF REFUND

  1. All the central, state, and local taxes and duties will be refunded in the exporter ledger account of the exporter with a retrospective effect
  2. A monitoring and audit mechanism will be put in place to physically verify the records of exporters
  3. These refunds will be used to pay basic custom duties on imported goods
  4. An exporter seeking the benefits of the scheme will have to declare his intention for each export item in the shipping bills or bills of exports

RATE OF REFUND

The rebate under this scheme would be claimed as a percentage of freight on board (FOB) value of exports. The reimbursement rate of taxes and duties will vary from 0.01% to 4.3% (maximum limit). Items such as gems & jewellery would have a refund rate of 0.01% whereas items such as shirt fabrics are at 4.3%. sectors such as steel, pharma, and chemicals are kept out of the RoDTEP scheme. Employment Oriented Sectors like Marine, Agriculture, Leather, Gems & Jewellery, etc. are covered under the Scheme. Other sectors like Automobiles, Plastics, Electrical / Electronics, Machinery, etc. also get support. The entire valve chain of textiles also gets covered through RoDTEP & RoSCTL. Identified export sectors and rates under RoDTEP cover 8555 tariff lines in addition to similar support being extended to apparel and made-ups exports under the RoSCTL scheme of the Ministry of Textiles.

By Taxblock India Pvt. Ltd

November 2021

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