Remission of Duties and Taxes on Exported Products (RoDTEP)

Remission of Duties and Taxes on Exported Products (RoDTEP) is a new scheme launched by the government to replace the existing MEIS scheme for exports of goods from India. RoDTEP Scheme, to benefit the exporters in place of MEIS was announced vide press release dated 31-Dec-2020, w.e.f. 01-Jan-2021, to all export goods. Notifications from DGFT and MOF still awaited.

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. Further, The Scheme will be implemented with end-to-end digitization.

The RoDTEP scheme would refund to exporters the embedded duties/taxes that were so far not being rebated/refunded. For example, 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 rebate would be claimed as a percentage of the Freight on Board (FOB) value of exports.

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. However, the rates are yet to be announced however such rates to be notified in future would be applicable from 01-Jan-2021.

Once the rates are notified, System would automatically calculate the RoDTEP amounts for all the items where RoDTEP was claimed. No changes in the claim will be allowed after filing of export general manifest.

Who is eligible for the scheme?

  • The Scheme will enclose all sectors (including textiles), with priority given to labour-intensive sectors which are enjoying benefits under MEIS Scheme at 2%, 3% or 5% of the export value.
  • Both merchant exporters (traders) and manufacturer exporters are eligible
  • There is no minimum turnover criteria to claim RoDTEP
  • Goods exported through e-commerce platforms via courier are also eligible.
  • Country of origin of the exported products should be India, re-exported products are not eligible.

Broad provisions are as under:

  • To avail the scheme exporter shall make a claim for RoDTEP in the shipping bill by making a declaration.
  • Once export general manifest (EGM) is filed, claim will be processed by Customs.
  • Once processed a scroll with all individual Shipping Bills for admissible amount would be generated and made available in the users account at ICEGATE,
  • User can create RoDTEP credit ledger account under Credit Ledger tab. This can be done by IECs who have registered on ICEGATE with a DSC.
  • Exporter can log in into his account and generate scrip after selecting the relevant shipping bills.

Benefits:  

  • The RoDTEP scheme would refund the embedded central, state and local duties/ taxes that were so far not being rebated/ refunded.
  • 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 just like MEIS/SEIS scrips.

Other Important Points:

  • The scheme does not extend to the export of services – No rationale/ reasoning. Only exporters exporting goods under Duty DBK and Spl. Adv. Authorization scheme are eligible.
  • No separate Code or Serial Number is needed for taking the benefit of the scheme. RITC code given in the shipping bill will suffice.
  • Ineligible categories: Exports by SEZ, EOUs, Advance Authorisation, Jobbing etc. Certain ineligible categories for MEIS may also be brought under the ineligible goods for RODTEP. However, clarification in this regard is awaited. However, clarification dated 15th January 2021 by SEZ Division, Department of Commerce provided that if an SEZ unit files shipping bill under RoDTEP scheme, the same would be allowed after mentioning the following in the remarks column:

Shipping Bill filed under RoDTEP scheme if applicable to SEZ unit & and subject to such conditions as prescribed including the product coverage”

In case exports from SEZ are covered under the RoDTEP scheme, such exports may be taken into account under RoDTEP.

  • The declaration on the shipping bill is needed to claim RODTEP. INFO CODE in Table SW_INFO_TYPE of the Shipping Bill should be mentioned as follows:

a. RODTEPY – If RoDTEP is availed

b. RODTEPN- if RoDTEP is not availed.

If RODTEPY is not specifically claimed in the Shipping Bill, no RoDTEP would accrue to the exporter.

  • For every item where RODTEPY is claimed in INFO CODE, a declaration has to be submitted in the Statement Table of the Shipping Bill (extract of the same is given later). No change would be allowed in the claim after filing of EGM.
  • Similar to MEIS scrips, RoDTEP scrips can also be transferred. The user to which the scrip is transferred also needs to have a valid credit ledger account.
  • Any difficulties faced may be brought to the notice of the Deputy Commissioner of Customs in-charge of Drawback.

Issues which need to be resolved by RoDTEP Advisory

  • Transitional mechanism to cover those cases where shipping bills were filed before 31-Dec-2020 but LEO issued on or after 01-01-2021 without the need of declaration of RoDTEP or the Code RODTEPY.
  • Allow the benefit of RoDTEP for shipment through courier and foreign post office by modifying CSB-V and PBE-2
  • Clarify that RoDTEP can be claimed even if exporter has availed EPCG as RoDTEP benefits are nowhere related to Capital Goods.
  • Dispense with the need of having RoDTEP declaration in the Shipping bill and allow the benefit without declaration, when RoDTEP rates are notified subsequently.
  • Immediate announcement of the RoDTEP rates for all the product so as to remove uncertainty and help the trade to factor such rates while negotiating or executing new orders.

Comparison between MEIS and RoDTEP

Detail MEIS RoDTEP
Schema of Incentive Additional Incentive on Exports of goods
apart from other refunds and drawbacks
available on undertaking the said exports.
Refund of Indirect taxes on Inputs used in the manufacture of exported product which is not being currently reimbursed by any other existing schemes.
WTO Compliance Non-Compliant with WTO trade norms Compliant with WTO trade norms
Incentive Percentage 2% to 5% of FOB value of Exports. Product-based % [To be notified later]
Mode of Issuance Issuance in the form of transferable scrips (Hard copy/ downloadable) Issuance in the form of transferable duty credit/ electronic scrip which will be maintained in electronic ledger.

As of now the users can log into their ICEGATE account and create the RoDTEP Credit Ledger Account, as scrip generation provision will be made functional on the issuance corresponding notification by the department and availability of the budget.

Annexure:

Annexure 1: ICEGATE has issued advisory to all users for registering at ICEGATE.

https://www.icegate.gov.in/Download/v1.2_Advisory_Registration_APPROVED.pdf

Annexure 2: Complete step-by-step guide for the user to create a RoDTEP credit ledger account, generate scrips and transfer the scrips to any other IEC. https://icegate.gov.in/Download/RoDTEP_Advisory-v3.0.pdf

Annexure 3: Implementation of RoDTEP Scheme in Customs Automated System Declarations in

Shipping Bill and further processing:

https://icegate.gov.in/Download/RoDTEP_Advisory-v3.0.pdf (page 15-17)

Annexure 4: Declaration to be filed as part of shipping bill or bill of export for export of goods under RoDTEP scheme:

“I/We, in regard to my/our claim under RoDTEP scheme made in this Shipping Bill or Bill of Export, hereby declare that:

1. 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.

2. 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 RoDTEP.

3. 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.”

H&A Comment: The government has ignored the trillion-dollar service industry for the purpose of extending export benefits as the RoDTEP is made applicable only for export of goods and not services. Presently, there is no clarity on this aspect. Further, exports by EOU, Advance Authorisation, Jobbing, etc., are kept outside the scheme. The trade & industry could seek to make representation before the government for extending the benefit to even these group of exporters.

Disclaimer: This material and the information contained herein prepared by Hiregange & Associates is intended for clients and other Chartered Accountants to provide updates and is not an exhaustive treatment of such subject. We are not, by means of this material, rendering any professional advice or services. It should not be relied upon as the sole basis for any decision which may affect you or your business

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Qualification: LL.B / Advocate
Company: Hiregange & Associates
Location: Bangalore, Karnataka, IN
Member Since: 21 Nov 2019 | Total Posts: 5
Graduated from Bangalore University and completed LLB from Karnataka State Law University. Heading GST refund, Custom and FTP division at Hiregnage & Associates Has headed GST reviews and compliance support for clients under various industries including pharma, logistics, retail trade, agric View Full Profile

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25 Comments

  1. Suman says:

    Dear Sir,

    I have one doubt.
    To create a RoDTEP Ledger in order to receive incentives on Icegate site , DSC of Class 3 will be required this is what was communicated to us. But recently last year also we had made something called DGFT Certificate to claim MEIS Incentives of Export. Can’t that be used to create ledger account this time for RODTEP?

    Do we need to create separately Class 3 DSC only?

  2. manu mori says:

    Exporter are getting RoDTEP amount indicated in their Shipping Bills are notional and calculated at dummy rate, since the final rates are not notified by Government.Benefit will available to exporters once the rates are notified.

  3. Rudrayani says:

    Sir in our shipping bill its mentioned as “we intend to claim rewards under merchandise from India scheme(MEIS).” So are we eligible to claim under RoDTEP scheme?

  4. Sumit says:

    Dear Sir, What will be the RoDTEP amount? how to calculate, because it’s showing very less as compare to MEIS, in the shipping bill appx 0.22% of FOB value.

  5. Sumit says:

    What will be the RoDTEP amount? how to calculate, because it’s showing very less as compare to MEIS, in the shipping bill appx 0.22% of FOB value.

  6. victor says:

    our export goods have advnace License duty free material as well as indig. with duty paid raw material, partial covered under authorisation & partial under RoDTEP, how can we file SB ?? pl. clarify

  7. Jayant Jain says:

    Export under Advance Authorisation should be included in RODTEP Scheme . Earlier in MEIS Scheme, it was available to all Export under ADvance Authorisation . So why in RODTEP it is excluded .

    This is the biggest ambiguity in same .

    It must be brought to notice of FM.

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