Remission of Duties and Taxes on Exported Products (RoDTEP)

7-Dec-2022: Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme gets extended to Chemicals, Pharmaceuticals and Articles of Iron & Steel from 15.12.2022

Taking a major step to boost exports, Centre today further expanded the scope of RoDTEP Scheme (Remission of Duties and Taxes on Exported Products) by including the exports made from the Chemical sector, Pharmaceuticals sector and exports of articles of iron & steel under chapters 28, 29, 30 and 73 of ITC(HS) schedule of items.

The expanded list of items will be applicable for exports made from 15th December, 2022. This was a long-standing demand of the industry which has been accepted and will go a long way in boosting our exports and competitiveness in the global markets, generate employment and contribute to the overall economy. The expanded list of eligible export items under Appendix 4R will increase from current 8,731 export items (8 digit tariff lines) to 10,342 export items (8 digit tariff lines).

RoDTEP is based on the globally accepted principle that taxes and duties should not be exported, and taxes and levies borne on the exported products should be either exempted or remitted to exporters. The RoDTEP scheme rebates/refunds the embedded Central, State and local duties/taxes to the exporters that were so far not being rebated/refunded. The scheme is being implemented from 1st January 2021 and the rebate is issued as a transferable electronic scrip by the Central Board of Indirect Taxes & Customs (CBIC) in an end to end IT environment.

It may be noted that Government is leaving no stone unturned to support domestic industry and make it more competitive in the international markets. Export centric industries are being reformed and introduced to better mechanisms so as to increase their competitiveness, boost exports, generate employment and contribute to the overall economy. This will go a long way in achieving our vision of building an Aatmanirbhar Bharat.

In the present times, when exports are facing headwinds on account of signs of recession in some of the developed markets & supply chain disruptions on account of Russia-Ukraine conflict, extension of RoDTEP to uncovered sectors like Chemicals, Pharmaceuticals & Articles of Iron & Steel is likely to enhance the export competitiveness of these sectors.

17-Aug-2021: Centre Notifies RoDTEP Scheme Guidelines and Rates Scheme to boost our exports & competitiveness

Centre has today notified RoDTEP Scheme Guidelines and Rates (Remission of Duties and Taxes on Exported Products). The scheme for zero rating of exports will boost our exports & competitiveness in the global markets .The rates of RoDTEP will cover 8555 tariff lines.

Remission of Duties and Taxes on Exported Products (RoDTEP) is one such reform, based on the globally accepted principle that taxes and duties should not be exported, and taxes and levies borne on the exported products should be either exempted or remitted to exporters.

Scheme’s objective is to refund, currently un-refunded:

Duties/ taxes/ levies, at the Central, State & local level, borne on the exported product, including prior stage cumulative indirect taxes on goods & services used in production of the exported product, and Such indirect Duties/ taxes/ levies in respect of distribution of exported products.

It may be noted that rebate under the Scheme shall not be available in respect of duties and taxes already exempted or remitted or credited.

RoDTEP is going to give a boost to Indian exports by providing a level playing field to domestic industry abroad.

RoDTEP support will be available to eligible exporters at a notified rate as a percentage of Freight On Board (FOB) value. Rebate on certain export products will also be subject to value cap per unit of the exported product.

Scheme is to be implemented by Customs through a simplified IT System. Rebate 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 Central Board of Indirect Taxes & Customs (CBIC).

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 RoSCTL scheme of Ministry of Textiles.

Employment Oriented Sectors like Marine, Agriculture, Leather, Gems & Jewellery etc. are covered under the Scheme. Other sectors like Automobile, Plastics, Electrical / Electronics, Machinery etc. also get support. The entire valve chain of textiles also gets covered through RoDTEP & RoSCTL.

4-Feb-2021: Scheme to Promote Textile Exports

Government announced a Special Package for garments and made-ups sectors to promote the textile exports,. The package offers Rebate of State Levies (RoSL), labour law reforms, additional incentives under Amended Technology Upgradation Fund Scheme (ATUFS) and relaxation of Section 80JJAA of Income Tax Act. The RoSL scheme has been replaced by the RoSCTL (Rebate of State and Central Taxes and Levies) scheme w.e.f 7th March 2019. The Government decided to continue the RoSCTL (Rebate of State and Central Taxes and Levies) scheme until such time the RoSCTL scheme is merged with Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme. For this purpose, the Government has approved adhoc allocation of funds of Rs.7398 crore for FY 2020-21 for issuance of duty credit scrips under RoSCTL Scheme.

Taking a major step to boost exports, Government has decided to extend the benefit of the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) to all export goods with effect from 1st January, 2021. Government has also notified a special one-time additional ad-hoc incentive of upto 1% of FoB value to be provided for exports of apparel and made-ups to offset the difference between RoSCTL and RoSL + MEIS@4%, from 7.3.2019 to 31.12.2019. Further, in order to boost exports in MMF sector, Government has removed anti-dumping duty on PTA, a key raw material for the manufacture of MMF fibre and yarn. Government has also removed anti-dumping duty on acrylic fibre, raw material for yarn and knitwear industry. Assistance is also provided to exporters under Market Access Initiative (MAI) Scheme. Government has enhanced interest equalization rate for pre and post shipment credit for exports done by MSMEs including textiles sector from 3% to 5% w.e.f. 02.11.2018. Benefits of Interest Equalization Scheme has been extended to merchant exporters from 02.01.2019 which was earlier limited to only manufacturer exporters. Merchandise Export from India Scheme (MEIS) was in operation from 1.4.2015 till 31.12.2020 for exports made (including textiles products) with an objective to offset infrastructural inefficiencies and associated costs involved in exporting goods/ products which were produced/ manufactured in India. Recent Budget (2021-22) announcements by Hon’ble Finance Minister includes scheme of Mega Integrated Textile Region and Apparel (MITRA) Parks which will enable textile industry to become globally competitive, attract large investments and boost employment generation.

1-Jan-2021: Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme implemented

In continuation of press release, dated the 31st December, 2020, regarding implementation of Remission of Duties and Taxes on Exported Products (RoDTEP) from the 1st January, 2021, it is further stated that the following shall be notified/made public shortly:

The details of export goods (tariff lines) eligible for RoDTEP scheme
The applicable RoDTEP rate, value caps (wherever applicable) on such eligible goods/tariff lines
The excluded category of exports
Other conditions and restrictions
The procedural details for grant of RoDTEP duty credit, and utilisation thereof.

The benefit of RoDTEP would be available subject to the conditions, restriction, exclusions, ineligibility and fulfilment of the procedural requirements as notified. On exports, eligible for RoDTEP, as per the Scheme details, the RoDTEP benefit shall be available from 1st January, 2021, even if the rates and other details are prescribed later, within next few days.

31-Dec-2020: Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme

The RoDTEP scheme would refund to exporters the embedded Central, State and local duties/taxes that were so far not being rebated/refunded and were, therefore, placing our exports at a disadvantage. The refund would be credited in an exporter’s ledger account with Customs and used to pay Basic Customs duty on imported goods. The credits can also be transferred to other importers.

The RoDTEP rates would be notified shortly by the Department of Commerce, based on the recommendation of a Committee chaired by Dr. G.K. Pillai, former Commerce and Home Secretary. The final Report of the Committee is expected shortly. An exporter desirous of availing the benefit of the RoDTEP scheme shall be required to declare his intention for each export item in the shipping bill or bill of export. The RoDTEP shall be allowed, subject to specified conditions and exclusions. The notified rates, irrespective of the date of notification, shall apply with effect from 1st January, 2021 to all eligible exports of goods.

13-Mar-2020: Cabinet approves scheme for “Remission of Duties and Taxes on Exported Products (RoDTEP)” to boost exports Scheme for enhancing Exports to International Markets

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi, has given its approval for introducing the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) under which a mechanism would be created for reimbursement of taxes/ duties/ levies, at the central, state and local level, which are currently not being refunded under any other mechanism, but which are incurred in the process of manufacture and distribution of exported products. This scheme is going to give a boost to the domestic industry and Indian exports providing a level playing field for Indian producers in the International market so that domestic taxes/duties are not exported.

Under the Scheme an inter-ministerial Committee will determine the rates and items for which the reimbursement of taxes and duties would be provided. In line with “Digital India”, refund under the Scheme, in the form of transferable duty credit/electronic scrip will be issued to the exporters, which will be maintained in an electronic ledger. The Scheme will be implemented with end to end digitization.

The refunds under the RoDTEP scheme would be a step towards “zero-rating” of exports, along with refunds such as Drawback and IGST. This would lead to cost competitiveness of exported products in international markets and better employment opportunities in export oriented manufacturing industries. In line with the vision of Prime Minister, various export oriented industries are being reformed and introduced to better mechanisms so as to increase their productivity, boost exports and contribute to the overall economy.

Salient features:

At present, GST taxes and import/customs duties for inputs required to manufacture exported products are either exempted or refunded. However, certain taxes/duties/levies are outside GST, and are not refunded for exports, such as, VAT on fuel used in transportation, Mandi tax, Duty on electricity used during manufacturing etc. These would be covered for reimbursement under the RoDTEP Scheme.

The sequence of introduction of the Scheme across sectors, prioritization of the sectors to be covered, degree of benefit to be given on various items within the rates set by the Committee will be decided and notified by the Department of Commerce (DoC).

The rebate would be claimed as a percentage of the Freight On Board (FOB) value of exports.

A monitoring and audit mechanism, with an Information Technology based Risk Management System (RMS), would be put in to physically verify the records of the exporters. As and when the rates under the RoDTEP Scheme are announced for a tariff line/ item, the Merchandise Exports from India Scheme (MEIS) benefits on such tariff line/item will be discontinued.

4-Mar-2020: New Export Incentive Scheme

The Government is formulating a Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) under which a mechanism would be created for re-imbursement of taxes/ duties/ levies, which are currently not being refunded under any other mechanism, at the central, state and local levels, but which are incurred in the process of manufacture and distribution of exported products. RoDTEP is based on the principle that taxes and levies borne on the exported products should be either exempted or remitted to exporters unlike the Merchandise Exports from India Scheme (MEIS), which is an export incentive scheme.

RoDTEP Scheme is being conceptualized keeping in view the WTO provisions, particularly the Agreement on Subsidies and Countervailing Measures (ASCM).