Cabinet has approved WTO compliant scheme for ‘Remission of Duties and Taxes on Exported Products (RoDTEP)‘ to boost exports for enhancing Exports to International Markets.

The scheme is explained here below in simplified manner –

#Objective of RoDTEP scheme

To make Indian exports cost competitive and create a level playing field for exporters in International market

# What is RoDTEP scheme?

This scheme will reimburse taxes/duties/levies at the central, state and local level, which are currently not being refunded.


# In which form the benefit will be given?

Under the RoDTEP, the benefit to exporters shall be given by DGFT in the form of transferable duty credit/electronic scrip, which will be maintained in an electronic ledger.

Items will be shifted in a phased manner from existing scheme MEIS to RoDTEP with proper monitoring & audit mechanism.

# On what value rebate would be applied?

The rebate would be claimed as a percentage (%) of the Freight On Board (FOB) value of exports.

The remissions under the RoDTEP scheme would be a step towards “zero-rating” of exports, along with refunds such as Drawback and IGST.

# What are the State and Central Levies and Taxes which are yet not refunded by the Government in the Duty Drawback Scheme and covered under RoSCTL Scheme? 

The Rebate of State Taxes and Levies stand for – VAT on transportation fuel, Captive Power, Mandi Tax, Electricity Duty, Stamp Duty on all the Export Documents, SGST which is levied on inputs like fertilizers, pesticides, etc., any kind of purchases which are made from unregistered dealers, inputs which are needed for the Transport Sector, Coal which is used in the production.

The Rebate of Central Taxes and Levies stand for – Central Excise Duty on Transportation Fuel, CGST included on all kinds of paid inputs like pesticides, fertilizers, etc., any kind of purchases which are made from unregistered dealers, inputs which are needed for the Transport Sector, Finally, the CGST and Compensation Cess on Coal which is used for the production of electricity.

# Recommendations

This is the right time at which the Exporters/Industry associations/Export promotion councils should make representations before the Inter-ministerial committee for determining the appropriate rates for each of their respective item under the said scheme.

Before making a representation a comparison should be done with an estimated prospective rates under RoTDEP scheme and eligible rates under the existing export incentive scheme.

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May 2021