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

About RoDTEP Scheme:

• This scheme was introduced through an amendment to the Foreign Trade Policy 2015-20, and it became effective for exports starting January 1, 2021.
• The primary aim of this scheme is to offset the taxes and duties incurred on exported goods that wouldn't otherwise be credited, reimbursed, or refunded in any way and are integrated into the exported goods.
• It was enforced to repeal and reduce taxes for exported products, thereby encouraging the conditions of exports and increasing the amount of exports in the country.
• The scheme will be administered by the Department of Revenue, Ministry of Finance.
• It is a WTO-compliant scheme and follows the global principle that taxes/duties should not be exported.
• RoDTEP Scheme replaced the Merchandise Export Incentive Schemes (MIES), in response to the US challenging the Indian export subsidies under the MEIS at the WTO. 
  • When the WTO dispute panel ruled against India, RoDTEP was framed to ensure that India remains WTO-compliant, while also supporting low-volume exports of commodities from India.
• Tax reimbursement under RoDTEP Scheme:
  • The Scheme provides a mechanism for reimbursement of taxes, duties, and levies, which are currently not being refunded under any other mechanism at the central, state, and local levels but which are incurred by the export entities in the process of manufacture and distribution of exported products.
  • This does not only include the direct cost incurred by the exporter but also the prior stage cumulative indirect taxes on goods.
• RoDTEP Scheme Eligibility Criteria:
  • It 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.
  • Such an exporter may either be the merchant or manufacturer exporter. However, such goodsshould have been directly exported by such a person.
  • Labor-intensive sectors that enjoy benefits under the MEIS Scheme will be given a priority.
  • Special Economic Zone Units and Export-Oriented Units are also eligible to claim the benefits under this scheme.
  • Goodsexported through e-commerce platforms are also eligible under this scheme.
  • Re-exported products are not eligible under this scheme.
• Process of Refund:
  • Rebate under the scheme is provided to eligible exporters as a percentage of the freight on board (FOB) value of exports.
  • Remission is issued in the form of transferrable e-scrips (a type of certificate with some monetary value) maintained in an electronic credit ledgerby the CBIC (Central Board of Indirect Taxes and Customs).
  • e-scrips can be used for paying basic customs duty on the import of goods or may be transferred electronically to another party.

Q1: What products are covered under the RoDTEP scheme?

The RoDTEP Scheme covers employment-oriented sectors like marine, leather, gems and jewellery, agriculture, etc. It will also support other sectors like electrical/electronics, automobiles, machinery, plastics, etc.

Source: BS