Remission of Duties or Taxes on Export Products (RoDTEP) was introduced for the Exporters to make Indian products cost-competitive and create a level playing field for them in the Global Market by Refund un-refunded Taxes or Duties/Levies, not Exempted or Rebated at Present by any other Mechanism.
Government Issued an Advisory on 1st Jan’2021, to implement the Scheme effective from 1st Jan’2021, and allowed the exporters to claim in the Shipping Bill, even though Rates were not announced. Subsequently the Rates range from 0.5% to 4.3% for various Sectors at 8 Digit Level as per Appendix – 4R of Hand Book of Procedures were announced by DGFT vide: Notification 19/2015-2020, dated 17th Aug’ 2021.
Now, CBIC announced the Manner of Issue Duty Credit for Goods Exported under the scheme vide Notification No: 76/2021-Customs (N.T.), 23rd September, 2021. The Duty Credit shall be subject to the following conditions:
Issuance of Credit:
> The duty credit is issued in lieu of remission of any duty or tax or levy, chargeable on any material used in the manufacture or processing of goods or for carrying out any operation on such goods in India that are exported, where such duty or tax or levy is not exempted, remitted or credited under any other Scheme;
> The duty credit is issued against export of goods notified in Appendix 4R of the FTP, at the respective rate and cap notified under the said Appendix.
> The duty credit is issued for the value calculated at the respective RoDTEP rate on the declared export FOB value or up to 1.5 times the market price of the said goods, whichever is less;
Declaration in the Shipping Bill & Clearance for Export:
> Claim of duty credit under the Scheme must be made by an exporter by providing the appropriate Declaration at the item level in the shipping bill or bill of export in the customs automated system;
> The Shipping Bill or Bill of Export, must be presented under section 50 of the said Act on or after the 1st day of January, 2021, and where the order permitting clearance and loading of goods for exportation under section 51 of the said Act has been made;
> After the claim is allowed by Customs upon necessary checks, including on the basis of risk evaluation through appropriate selection criteria, Export Manifest or Export Report must be Filled;
> Duty credit is Issued in accordance with any Rules or Regulations issued in relation to duty credit, e-scrip or electronic duty credit ledger; CBIC issued “Electronic Duty Credit Ledger Regulations, 2021” vide Notification No. 75/2021-Customs (N.T.) 23rd September, 2021.
Issuance of Duty Credit in the Scroll:
> The claim shall be allowed by Customs as per the conditions and restrictions notified for the Scheme, after the filing of export manifest or export report.
> Once the claim is allowed, a scroll for duty credit will be generated by the proper officer in the customs automated system. Separate scrolls will be generated for each Scheme.
> The scroll details, including the details of shipping bill or bill of export, duty credit allowed and date of generation of scroll, shall be visible in the customs automated system to the exporter who is the recipient of such duty credit.
Exports Not be Eligible for Duty Credit
> The export categories or sectors listed in Table-1 annexed hereto shall not be eligible for duty credit under the Scheme;
Realization of Export Proceeds:
> The duty credit allowed under the Scheme against export of goods notified in the Appendix shall be subject to realization of sale proceeds in respect of such goods in India within the period allowed under the Foreign Exchange Management Act, 1999 (42 of 1999); failing which such duty credit shall be deemed to be ineligible;
> The exporter must have realised the sale proceeds against export of goods made earlier by the said exporter where the period allowed for realization, including any extension of the said period by the Reserve Bank of India, has expired:
> Provided that duty credit shall be issued by Customs in excess of the ineligible amount of duty credit pertaining to the unrealised portion of sale proceeds against export of goods made earlier.
> Provided further that if the Principal Commissioner of Customs or Commissioner of Customs has reason to believe, on the basis of risk evaluation or on the basis of enquiry, that the claim of duty credit made by an exporter on export goods may not be bona fide, he may direct, for reasons to be recorded in writing, to allow duty credit after realisation of sale proceeds of such exports;
For Exports made to Nepal, Bhutan and Myanmar
> Duty credit under the Scheme for exports made to Nepal, Bhutan and Myanmar shall be allowed only upon realization of sale proceeds against irrevocable letters of credit in freely convertible currency established by importers in Nepal, Bhutan and Myanmar in favour of Indian exporters for the value of such goods.
Creation of e-scrip in the Ledger:
> The exporter shall have the option to combine the duty credits under a particular Scheme, allowed to him in one or more shipping bills or bills of export, and to carry forward the said duty credits to create an e-scrip for that Scheme in the ledger, customs station-wise according to the customs station of export, within a period of one year from the date of generation of the scroll in the customs automated system :
> Provided that if the exporter does not exercise the said option of creating the e-scrip within the said period of one year, duty credit in each scroll will be combined customs station-wise for each Scheme and will be automatically created by the customs automated system as a single e-scrip for duty credit for that Scheme, for each customs station, in the ledger of the said exporter.
> Each e-scrip shall have a unique identification number and date of its creation and all transactions in the ledger shall be carried out using the said number and date.
Registration of e-scrip:
> The customs station of export shall be the customs station of registration for an e-scrip.
> The registration of e-scrip shall be automatic and separate application for the same shall not be required to be filed.
Utilization of Duty Credit e-Scrip & Validity:
> The duty credit available in the e-scrip in the ledger shall be used for payment of duties of Customs specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).
> The e-scrip shall be valid for a period of one year from the date of its creation in the ledger and any duty credit in the said e-scrip remaining unutilized at the end of this period shall lapse.
> Such duty credit in the e-scrip that has lapsed shall not be re-generated.
> The ledger, including e-scrip and the transactions made therein, shall be visible in the customs automated system to the recipient of such duty credit and the Customs.
Transfer of Duty Credit in e-scrip:
> Transfer of duty credit in e-scrip shall be allowed within the customs automated system from the ledger of a person to the ledger of another person who is a holder of an Importer-exporter Code Number issued in terms of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992).
> The duty credit available in an e-scrip shall be transferred at a time for the entire amount in the said e-scrip to another person and transfer of the duty credit in part shall not be permitted.
> The period of validity of the e-scrip, of one year from its creation, shall not change on account of transfer of the e-scrip.
> The ledger of the transferee, including e-scrip and the transactions made therein, shall be visible in the customs automated system to the transferee and the Customs.
Cancellation of Duty Credit:
> Where a person contravenes any of the provisions of the Act or any other law for the time being in force or the rules or regulations made thereunder in relation to exports to which the duty credit relates, or in relation to the e-scrip, the Principal Commissioner of Customs or Commissioner of Customs having jurisdiction over the customs station of registration of the e-scrip may, after enquiry, pass an order to cancel the said duty credit or e-scrip.
> Where the e-scrip is so cancelled, the duty credit amount in the said e-scrip shall be deemed never to have been allowed and the proper officer of Customs shall proceed to recover the duty credit amount used in such e-scrip or transferred from such e-scrip.
> The proper officer of Customs may, without prejudice to any other action that may be taken under this Act or any other law for the time being in force, suspend the operation of the said e-scrip or the electronic duty credit ledger of such exporter or any duty credit transferred from such e-scrip, during pendency of the enquiry under sub-clause (1).
Recovery of amount of Duty Credit :
> Where an amount of duty credit has, for any reason, been allowed in excess of what the exporter is entitled to, the exporter shall repay the amount so allowed in excess, himself or on demand by the proper officer, along with interest, at the rate as fixed under section 28AA for the purposes of that section, on that portion of duty credit allowed in excess, which has been used or transferred, and where the exporter fails to repay the amount along with interest, as applicable, it shall be recovered in the manner provided in section 142 of the said Act.
> The duty credit amount that an exporter is so required to repay under sub-clause (1) shall be deemed never to have been allowed, and if the exporter fails to repay the said amount within a period of fifteen days along with interest so demanded, then the proper officer of Customs may, without prejudice to any action against the exporter, proceed for recovery of the said duty credit amount from the transferee in the manner as provided in section 142 of the said Act.
Recovery of Amount of Duty Credit where Export Proceeds are Not Realised:
> Where an amount of duty credit has been allowed to an exporter but the sale proceeds in respect of such export goods have not been realized by the exporter in India within the period allowed under the Foreign Exchange Management Act, 1999 (42 of 1999), the exporter shall, himself or on demand by the proper officer, repay the amount of duty credit, along with interest, at the rate as fixed under section 28AA of the said act for the purposes of that section, within fifteen days of expiry of the said period.
> In case any extension of the said period for realisation of sale proceeds has been given by the Reserve Bank of India and the exporter produces evidence of such extension to the proper officer, and if the said sale proceeds are not realised in such extended period, the exporter shall repay the said amount of duty credit along with the said interest, within fifteen days of expiry of the said period.
> If a part of the sale proceeds has been realized, the amount of duty credit to be recovered shall be the amount equal to that portion of the amount of duty credit allowed which bears the same proportion as the portion of the sale proceeds not realized bears to the total amount of sale proceeds.
> Where the exporter fails to repay the duty credit amount within the said period of fifteen days, the said duty credit shall be deemed never to have been allowed and it shall be recovered, along with the said interest, in the manner as provided in section 142 of the said Act.
> The proper officer of Customs may, without prejudice to any action against the exporter, proceed for recovery of said duty credit amount from the transferee in the manner as provided in section 142 of the said Act.
> During the pendency of any recovery, as provided in clauses 4 and 5, no further duty credit, on any subsequent exports, shall be allowed to such exporter till the time such recovery is made and any unutilised duty credit with the exporter or the transferee shall be suspended pending such recovery.
Export categories or sectors ineligible for duty credit
1. Goods which are restricted or prohibited for export under Schedule-2 of Export Policy in ITC-HS
2. Export of imported goods covered under paragraph 2.46 of Foreign Trade Policy.
3. Exports through trans-shipment, meaning thereby exports that are originating in third country but trans-shipped through India.
4. Goods subject to minimum export price or export duty.
5. Deemed exports under Foreign Trade Policy
6. Goods manufactured or exported by any of the units situated in Special Economic Zone/Free Trade Warehousing Zone/ Electronic Hardware Technology park/Bio-Technology park/Export Processing Zone.
7. Goods manufactured or exported by a unit licensed as hundred per cent Export Oriented Unit.
8. Goods exported under Advance Authorisation or Duty Free Import Authorisation issued under the relevant Foreign Trade Policy.
9. Goods manufactured and supplied by units in Domestic Tariff Area to units in Special Economic Zone/Free Trade Warehousing Zone.
10. Goods manufactured in Special Economic Zone/Free Trade Warehousing Zone/Export Oriented Unit/Electronic Hardware Technology Park/Bio-Technology Park/Export Processing Zone and exported through DTA unit.
11. Goods manufactured partly or wholly in a warehouse under section 65 of the Customs Act, 1962 (52 of 1962).
12. Goods availing the benefit of the notification No. 32/1997-Customs, dated the 1st April, 1997.
13. Goods for which claim of duty credit is not filed in a shipping bill or bill of export in the customs automated system.
14. Goods that have been taken into use after manufacture.
Disclaimer : The views and opinions; thoughts and assumptions; analysis and conclusions expressed in this article are those of the authors and do not necessarily reflect any legal standing.
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