The Government of India recently notified guidelines and rates for Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. The benefits of this scheme have been extended to exporters w.e.f. 1 January 2021. The scheme has been notified as a part of Chapter-4 of the Foreign Trade Policy, which covers duty remission schemes.
It is a combination of the current Merchandise Export from India Scheme (MEIS) and the Rebate of State and Central Taxes and Levies (RoSCTL) except for some specified goods such as apparel/garments (Chapters-61 and 62) and made-ups (Chapter-63), which would be continued under RoSCTL.
Key highlights of the scheme:
- Reimbursement of taxes/duties/levies at the central, state, or local level
- Issuance in the form of electronic duty credit scrips or e-scrips
- Freely transferrable and used only for payment of basic customs duty (BCD)
RoDTEP scheme will enhance India’s competitiveness in the global market as reimbursement of un-refunded duties and taxes will make products more attractive.
We recommend that exporters should undertake the following steps:
- Evaluate present rate notified and actual embedded tax/duty on the export products
- File representation before the RoDTEP committee for rate increase/inclusion of product or category of goods
This publication throws light on the benefits and exception of the recently announced RoDTEP scheme.