On August 17, 2021, the Government announced the rates and guidelines for Remission of Duties and Taxes on Exported Products (RoDTEP), an export incentive scheme.
- Objective: To boost India’s exports and ease liquidity for exporters.
- The tax refund rates for different sectors under RoDTEP were fixed in the range of 0.5 percent to 4.3 percent.
- The scheme will be implemented by the Central Board of Indirect Taxes and Customs (CBIC) through a simplified IT System.
Key Points:
i.RoDTEP is an incentive scheme for 8,555 products including employment-generating sectors like marine, agriculture, leather, gems, and jewellery sectors; and other segments like automobile, plastics, electrical/electronics, machinery.
ii.Central and State duties, taxes, and levies imposed on input products, among others, would be refunded to exporters under RoDTEP.
iii.The Refund will be issued in the form of a transferable duty credit/electronic scrip (e-scrip) which will be maintained in an electronic ledger by the CBIC.
iv.The rebate/refund under the scheme will not be available for duties and taxes that are already exempted/remitted/credited.
v.Government has allocated Rs 19,400 crore for FY22 for both the RoDTEP and the Rebate of State and Central Taxes and Levies (RoSCTL), in which, Rs 12,454 crores was allocated to RoDTEP (for 8, 555 products out of 11,000 traded items).
- The remaining Rs 6,946 crore was for the RoSCTL scheme, which was announced for the export of garments and apparel.
vi.Excluded Sectors and Goods: Sectors of chemicals, steel and pharmaceuticals were excluded from the scheme.
- Export goods, which are subject to Minimum export price, restricted and prohibited items, deemed exports, goods manufactured or exported by units situated in special economic zones were also excluded from the RoDTEP scheme.
Note – Commerce Secretary B V R Subrahmanyam has announced the above regulations.
Background:
In January 2021, the Directorate General of Foreign Trade (DGFT) had introduced the RoDTEP, a WTO (World Trade Organisation)-compliant scheme for all eligible goods with effect from January 1, 2021, by replacing Merchandise Export from India Scheme (MEIS).
The finance ministry has set up a committee under the chairmanship of former commerce and home secretary GK Pillai to finalise the rates under RoDTEP.
MEIS:
i.It was introduced in the Foreign Trade Policy (FTP) 2015-20 w.e.f. 1st April 2015 and it has provided refunds at the rate of 2 percent, 3 percent and 5 percent of the value (free-on-board) of exports.
ii.It was scrapped, as it was not directly linked to input taxes and levies that went into the production of the exported item and also was not compatible with WTO.
Recent Related news:
According to a notification by the CBIC, Government is set to mandate Electronic-invoicing (e-invoicing) under the Goods and Services Tax (GST) regime for business entities with a turnover of INR 50 Crore & more from April 1, 2021 (start of next financial year) for business to business transactions.
About Central Board of Indirect Taxes and Customs(CBIC):
It is a part of the Department of Revenue under the Ministry of Finance
Headquarters – New Delhi
Chairman – M. Ajit Kumar
