The long-awaited support and advantage needed to bolster Export Oriented Units (EOUs), Advance Authorization Holders, and Special Economic Zones (SEZs) has finally been granted by the government. This extension was announced through notification no. 70/2023 dated 8th March 2024, effective for a period of six and a half months, from 11th March 2024 to 30th September 2024.
However, the Manufacturing and Other Operations in a Customs Bonded Warehouse (MOOWR) remains excluded from this support and benefit.
Here are the details of RoDTEP Scheme
What is RoDTEP Scheme?
RoDTEP stands for Remission of Duties and Taxes on Export Products. It replaced the existing MEIS (Merchandise Exports from India Scheme). The scheme ensures that the exporters receive the refunds on the embedded taxes and duties previously non-recoverable.
RODTEP scheme is notified with an Objective to neutralize the taxes and duties suffered on exported goods which are otherwise not credited or remitted or refunded in any manner. The benefit is given as percentage of FOB or fixed amount per unit of measurement as prescribed in the Appendix 4R to the Notification.
Compensation of Duties and Taxes covered under RoDTEP Scheme
The scheme intends to compensate the duties/taxes/levies at the Central, State and Local level borne on the exported product including prior stage cumulative indirect taxes on goods and services used in the production and distribution of the exported product such as:
1. VAT and Excise duty on the fuel used in self-incurred transportation costs; on the fuel used in generation of electricity via power plants or DG Sets; on the fuel used in running of machineries/plant;
2. Electricity duty on purchase of electricity;
3. Mandi Tax/ Municipal Taxes/ Property Taxes;
4. Stamp duty on export documents;
5. Un-creditable CGST/SGST/IGST/Compensation Cess on items falling under [passenger transportation vehicles, food and beverages, rent-a-cab, works contract services, etc.]
Which are the ineligible categories who are not eligible to claim RoDTEP?
1. Exports of imported goods as per para 2.46 of FTP Le. Import for Export.
2. Exports through transhipments, meaning exports originating in third country but transhipped through India.
3. Export products subject to minimum export price or export duty.
4. Products restricted for exports under Schedule 2 of Export Policy in ITC (HS).
5. Products prohibited for exports under Schedule 2 of Export Policy in ITC (HS).
6. Deemed Exports.
7. Supplies of products manufactured by DTA units to SEZ/FTWZ units.
8. Products manufactured in EHTP and BTP.
9. Products manufactured partly or wholly in a warehouse under section 65 of Customs Act, 1962 i.e. MOOWR etc.
10. Products manufactured or exported in discharge of export obligation against advance authorisation or DFIA or special advance authorisation issued under a duty exemption scheme of relevant FTP.
11. Products manufactured or exported by 100% EOU.
12. Products manufactured or exported by any of the units situated in FTZ, EPZ of SEZ.
13. Products manufactured or exported availing the benefit of Notification No 32/1997- Customs (e. jobbing transactions).
14. Exports for which electronic documentation in ICEGATE EDI has not been generated or exports from non-EDI port.
15. Goods which have been taken into use after manufacture (i.e. second-hand goods).
RoDTEP (Remission of Duties and Taxes on Exported Products) support has been extended to exports made by EOUs (Export Oriented Units), SEZs (Special Economic Zones), and Advance Authorisation holders w.e.f 11th Mar 2024. This extension was announced through notification no. 70/2023 dated 8th March 2024. Appendix 4RE provides the details for applicable rates for the products.
How to avail benefits under RoDTEP Scheme?
The ICEGATE portal (Indian Customs Electronic Gateway) will contain the details regarding the credits availed by the exporter. At the port, the exporter must indicate in the shipping bill the details regarding the claim of the RoDTEP benefit with regard to a particular item of export and generate a credit scrip for it. These credit scrips are then used to pay basic customs duties, claim rebates or can be transferred to other importers, as the case may be.
The process for the generation and claiming of scrips under the RoDTEP scheme are as follows-
1. The exporter should make a declaration of the claim for RoDTEP in the shipping bill.
2. Once the Export General Manifest (EGM) is filed, the claim will be processed by the Customs.
3. After processing the claim, a scroll with all individual Shipping Bills for the admissible amount will be generated and available in the users account at ICEGATE portal.
4. The exporter should log in to the ICEGATE portal and create a RoDTEP credit ledger account.
5. After the RoDTEP credit ledger account is created, the exporters can log in to their accounts and generate scrips by selecting the relevant shipping bills.
6. Once, the scrips are generated, the refund will be credited and reflected in the exporter’s ledger account and will be available for utilisation in payment of the eligible duties and during imports or for transfer to any other importers.
The declaration that needs to be filed at the time of filing the Shipping Bill
At the time of filing the shipping bill under the RODTEP scheme, following declaration must be filed:
“I/We, in regard to my/our claim under RoDTEP scheme made in this Shipping Bill or Bill of Export, hereby declare that:
I/ We undertake to abide by the provisions, including conditions, restrictions, exclusions and time- limits as provided under RoDTEP scheme, and relevant notifications, regulations, etc., as amended from time to time. Any claim made in this shipping bill or bill of export is not with respect to any duties or taxes or levies which are exempted or remitted or credited under any other mechanism outside RoDTЕР.
I/We undertake to preserve and make available relevant documents relating to the exported goods for the purposes of audit in the manner and for the time period prescribed in the Customs Audit Regulations, 2018.”
Procedure to claim the credit and generate the e-credit scrips on the online ICEGATE Portal
Step 1: From the Escrip Home Page, user can select SB Details Tab for scrip generation
Step 2: User is provided with the feature of selecting Shipping bills/scrolls for which the scrips are to be generated. User can select RoSCTL or RoDTEP under scheme name and location.
Step 3: An error message will be displayed if the scheme is not selected since it is a mandatory field.
Step 4: User can view and select the shipping bills and can click on “Generate Scrip” button to generate scrip. User can select all the shipping bills at once by checking box in first row.
Step 5: Scrip will be generated for the selected shipping bill/ scroll. After successful Scrip Creation the following message will be displayed on the screen.
“Scrip No.:XXXXXXXXXX has been generated successfully”
Procedure for transfer of the e-credit scrips
Any user who has created an Escrip account can transfer a scrip to another user. The user to which the scrip is to be transferred also needs to have a valid Escrip account.
Below are the steps for scrip transfer:
Step 1: From the Escrip Home page, user can select the “Scrip Transfer tab to transfer a particular scrip to any other user.
Step 2: It is mandatory to select a scheme, RODTEP or RoSCTI, in order to select the scrips to be transferred.
After that, the user can select the appropriate scrip to be transferred from the generated scrips. The list of the generated scrips is available in the drop-down menu along the “Scrip Available” Option.
Step 3: After appropriate scrip selection, user can view scrip amount and enter IEC of the user to which the scrip is to be transferred. These details, of the IEC holder to whom the user wants to make transfer, can be entered in the textbox alongside “Transfer To” option.
Step 4: OTP is generated and sent to the user who has initiated the transfer on the registered mobile number and email ID. It has to be entered by that user to transfer the scrip successfully. This OTP is valid for a window of 15 minutes only. An error message will be displayed to the user if wrong OTP is entered.
Step 5: After successfully transferring the request, Scrip will be viewed in a grid on the same page. User who has initiated the transfer scrip request can cancel the request at this stage using the cancel button.
Approve Scrip Transfer Request
Step 1: An approval request is sent to the IEC for whom transfer request has been initiated by the user. This IEC holder who has to approve the request needs to login, select Escrip tab under Financial Services. He will have to create an Escrip account if not already created.
Step 2: From the Escrip Home page, the user to whom a scrip is transferred can approve/cancel the transfer scrip request by clicking on the “Approve Scrip Transfer” tab.
Step 3: User can view all scrips, which are requested to be transferred to him. User can cancel the request as well by clicking on the cancel button, if does not wish to accept the scrip.
Step 4: The transferee can approve the transfer scrip request after clicking the approve button, Transferee has to fill a valid OTP. After clicking the Approve button, the transferee is directed to fill OTP. This OTP is generated and sent to the transferee over registered Mobile number and email ID and is valid only for 15 minutes. In case, the user fails to enter a valid OTP in 15 minutes, the user is redirected to generate a new OTP.
Step 5: The Scrip will be transferred to Transferee after successful OTP validation. Message is also generated and displayed on the screen:
“Scrip XXXXXXXXXXXXXX has been transferred Successfully.
Are there any implications on Capital goods imported under EPCG license to neutralize the BCD cost?
The restriction under the Scheme does not cover the capital goods imported under EPCG Scheme. Thus, exporter may continue to claim the benefit of EPCG and RODTEP simultaneously.
Whether RoDTEP would be credited in exporters’ bank account similar to duty drawback?
RODTEP would be issued in the form of transferrable e-scrips which will be maintained in an electronic credit ledger by the CBIC and could be used for paying Basic Customs Duty on import of goods or may be transferred electronically to other party. The benefit will not be in the form of direct credit to the bank account.
Whether SWS, health cesses etc may be paid by utilizing the credit scrip?
Social Welfare Surcharge (SWS) is levied under Section 110 of Finance Act, 2018 as a duty of Customs. For instance, the SWS is calculated at the rate of ten per cent on the aggregate of duties, taxes and cesses which are levied and collected under section 12 of the Customs Act, 1962 and it is in addition to any other duties of Customs or tax or cess chargeable on imported goods.
The RoDTEP benefit is provided by way of an e-credit scrips issued under remission scheme for exporters under the Foreign Trade Policy. As per Para 4.56 of the Foreign Trade Policy 2015-20, these scrips can be used for payment of Basic Customs Duty only.
It is to be noted that the cesses are a separate levy made under a separate enactment and the collections generated out of the proceeds for cesses are used for some specific purposes. Although, it is levied as a duty of customs, but that by it selves does not make it a Basic Customs Duty. Hence, it is to mention that the debit of SWS through e-credit scrip is not envisaged in the FTP and hence the same needs to be paid through a separate challan in cash.
This aspect is also clarified by the CBEC vide its Circular No. 2/2020-Cus., dated 10-1-2020 in the context of utilization of SWS for the purpose of MEIS, SEIS etc. The analogy explained above may also apply to Health cess.
Conclusion: The extension of the RoDTEP scheme until September 2024 provides much-needed support to EOUs, Advance Authorization Holders, and SEZs, facilitating their export activities. By understanding the eligibility criteria, benefits, and process for availing RoDTEP advantages, exporters can optimize their export operations and leverage the scheme’s benefits for sustainable growth. However, it’s crucial for exporters to stay updated on any further developments or changes in the scheme to ensure compliance and maximize benefits.
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Disclaimer: The article is based on the relevant provisions and as per the information existing at the time of the preparation. In no event I shall be liable for any direct and indirect result from this article. This is only a knowledge sharing initiative. The article is intended as a news update and affluence advisory neither assumes nor accepts any responsibility for any loss arising to any person acting or refraining from acting because of any material contained in this article.
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