Summary: The RODTEP (Remission of Duties and Taxes on Exported Products) Scheme aims to refund duties, taxes, and levies incurred by exporters at various stages, including production and distribution. Administered by CBIC, it offers rebates based on the FOB value of exports categorized under specific 8-digit HS codes. Exporters claiming over Rs. 1 crore in a financial year must file an Annual RODTEP Return (ARR) by March 31st of the following year, detailing the taxes and duties incurred during production. Separate returns are required for exports under different categories like DTA, AA, and SEZ. If the claim exceeds Rs. 50 lakh for any HS code, an individual return must be filed for that code. Failing to file the ARR within the stipulated time can lead to denial of future benefits and penalties, including a composition fee. For minor items with insignificant values, approximations may be used. Records related to the return must be maintained for five years. Even merchant exporters with claims over Rs. 1 crore need to file ARR by coordinating with manufacturers.
Objective
Duty Remission Schemes objective is to enable duty free import of inputs for export production and one of the remission Schemes is Remission of Duties and Taxes on Exported Products (Rod TEP).
This Scheme Objective and Operating Principles are as under;
- To refund, currently unrefunded 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 of the exported product and
- Such indirect Duties/ taxes / levies in respect of distribution of exported product
The rebate under the Scheme shall not be available in respect of duties and taxes already exempted or remitted or credited.
In nutshell, the objective is to refund currently unrefunded Duties/ taxes / levies by the CENTRAL Government or STATE Government or LOCAL bodies such as municipalities, panchayat etc whether it is levies in pre-production stage or during the production or post production such as during the distribution of exported products.
Notification and administration of The RodTEP
Rod TEP Scheme is notified by Department of Commerce and administered by CBIC (Customs)
Remission under the Scheme
Under the Scheme, a rebate would be granted to eligible exporters at a notified rate as a percentage of FOB value on export of items which are categorized under the notified 8-digit HS Code. Rates of rebate / value cap per unit under RoDTEP notified in Appendix 4R
Why Annual RodTep Return
- To assess the nature of Inputs used in exports production
- To assess the Amount of actual taxes and duties incurred
Frequency & Format of Return
Annual Return (for financial year) and format is Prescribed in Appendix 4RR Handbook of Procedures, 2023
Due Date
By 31st March of the next financial year that is RODTEP claims information for financial year 2023-2024 shall be filed by 31-03-2025.
Applicability
Exporters whose RODTEP claim exceeds Rs. 1 Crore in a financial year across all 8-digit HS Codes.
If the total RoDTEP claim for a IEC exceeds Rs. 1 crore in a financial year, filing the Annual RoDTEP Return (ARR) is mandatory. Conversely, if the total claims for a given IEC remain below Rs. 1 crore for the financial year, need NOT to file the ARR.
The exporters are required to file the annual RoDTEP Return if the total RoDTEP claim value in more the Rs. 1 Cr or more. For example- If the total RoDTEP claim value is Rs. 1,00,00,000, however, the actual claim received is Rs. 95,00,000, the exporter is required to file the Annual RoDTEP Return.
| If none of the individual 8-digit ITCHS codes crosses Rs. 50 lakh in RoDTEP claims, exporters may file the ARR only for the 8 digit code under which exporter claimed the highest amount.
For example, if total RoDTEP claim in a year amounts to Rs. 1.2 crore— where the distribution is -ITC-HS1: Rs. 20 lakh, -ITC-HS2: Rs. 30 lakh, -ITC-HS3: Rs. 40 lakh, and -ITC-HS4: Rs. 30 lakh, Then need to file an ARR only for ITC-HS3, since it represents the highest claim In other words, Separate returns are needed to be filed for the individual 8-digit HS Codes. However, it is required to file return for only such items wherein the RoDTEP benefit claimed value is equal to or more than Rs. 50 Lakhs in a year. Otherwise if under none of the 8-digit HS Code, the support accrued has crossed the threshold of Rs. 50 Lakhs a year, then a single return for the 8-digit HS Code with highest accrued support should be filed. |
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| However, after qualifying under the 1 cr rule, if any individual 8-digit ITC-HS code exceeds Rs. 50 lakh in RoDTEP, an ARR must be filed for each of those codes.
For example, if total RoDTEP claim is Rs. 1.2 crore, where the distribution is -ITC-HS1 at Rs. 60 lakh, -ITC-HS2 at Rs. 51 lakh, -ITC-HS3 at Rs. 3 lakh, and -ITC-HS4 at Rs 6 lakh, Exporters are required to file ARRs for ITC-HS1 and ITC-HS2, while exporters may ignore the remaining codes whose claims are below the Rs. 50 lakh threshold. |
Consequences of Non filling of RODTEP Annual Return
- Deniel of further benefits/scroll under RODTEP scheme after grace of three months i.e. after 30th June
- Composition fee of Rs 10000/- to be paid for filling up to 30th June (that annual return for FY 2023-2024 can be filed up to 30th June 2015 on payment of composition fee of Rs 10000/-).
- Thereafter composition fee will be Rs 20, 000/-.Subsequent of payment of composition fee RODTEP scroll will be resumed within 45 days. Resumption of scroll out shall cover shipping bills that were not scroll out earlier on account of non-submission of Annual RODTEP return.
Retention of Record
Physical/digital record substantiating the annual RODTEP return (‘ARR’) shall be maintained and preserved for five (‘5’) years.
Separate Return
To be filed for DTA and for AA/EoU/SEZ Exports.
Use of Pro-Rata Basis
The Tax/Duties/Levies need to be provided in the fields on pro-rata basis for export products on which the return is being filed
Use of Approximates
Wherever approximation is used for calculation of taxes/duties/levies etc. the same should be justified and substantiated at the time of scrutiny in case the return is picked up for scrutiny on the Risk Management System.
Minor Items may be ignored
The return should be complete to the extent possible. Minor items with low value may be omitted if they don’t significantly alter the amount of remission claimed.
| Cost of Inbound Transport: | Cost of Outbound Transport |
| By ROAD | |
| Total VAT paid on transportation cost | |
| for procuring raw materials, consumables, spares for manufacture of exported product
(Inbound Transportation-By Road). |
with respect to process of transporting exported product from factory to the gateway port
(Out bound Transportation-By Road) |
| Total Excise duty paid on transportation cost | |
| for procuring raw materials, consumables, spares for manufacture of exported product
(Inbound Transportation-By Road ) |
with respect to process of transporting exported product from factory to the gateway port
(Out bound Transportation-By Road) |
| BY RAIL | |
| Total VAT paid on transportation cost | |
| For procuring raw materials, consumables, spares for manufacture of exported product (Inbound Transportation-By Rail) | with respect to process of transporting exported product from factory to the gateway port
(Out bound Transportation-By rail) |
| Total Excise duty paid on transportation cost | |
| For procuring raw materials, consumables, spares for manufacture of exported product (Inbound Transportation-By Rail) | For transporting exported product from factory to the gateway port (Out bound Transportation-By rail) |
Electricity Duty:
Total Electricity Duty paid for manufacture of exported product in the period 01.04.2023 to 31.03.2024
This means the total tax (electricity duty), apportionable to exported product, paid on the electricity consumed for the financial year 2023- 2024.
Merchant exporters also need to file ARR
Merchant exporters who have availed over Rs 1 Cr. Of RoDTEP in the given financial year are expected to file ARR by tying up with the manufacturer supplier of the goods for providing the information
This article is prepared by CA Rajnish Kumar (+91-8130883807) only for academic purpose and Effort have been made to make document error free, but it is possible that some error might have crept into this document.
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