Prevailing rate of RODTEP/ROSCTL is approximately 79%-80% of license value, it is a big cause of concern for exporters, as rate of MEIS before reopening of MEIS window was 96%-97%. This huge difference in price of RODTEP/ROSCTL is eroding profitability of exporters.

Besides huge supply of MEIS / RODTEP/ ROSCTL, main reason for reduction in prices of these scrips is that as per Custom Notification No. 76/2021 dated 23rd September,2021, and No. 77/2021 dated 24th September,2021, importers (Transferee of e-script) will be liable to pay face value of e -script along with interest to custom authorities in case of excess allowance of script to exporters for any reason AND non realization of export proceeds.  Relevant provisions of the Notification are being reproduced for ready reference: –

Recovery of amount of duty credit. – (1) 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. 

RODTEP ROSCTL - A Nightmare for Importers and Exporters

 (2) 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. –  

(1)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.

  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.” 

From the above, in case if exporter do not pay the value of script along with interest from date of issue of script till date of payment within 15 days of notice of demand, the importer (transferee) of RODTEP/ROSCTL script will be liable to pay the same. So all importers should read above provisions carefully.

We through this article hereby request CBEC to make relevant changes in above notification to the effect that importer should not be liable to pay any amount in case of any kind of defect in the RODTEP / ROSCTL script. It is to mention that no such provisions of recovery from importers were in erstwhile MEIS scheme.

The above suggestion if accepted will support genuine exporters to fetch better price of their scripts. It will also be in interest of importers as the scripts so purchased will be without any risk in any time to come.

We hereby request all exporters association / export promotion councils to send presentation to CBEC / DGFT / MOC/ MOF on above lines for the cause of exports.

It is submitted that this suggestion will not cause any additional cost to revenue.

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