Scheme Guidelines for Remission of Duties and Taxes on Exported Products (RoDTEP)

As we all are aware that the new RoDTEP scheme was introduced as a part of Foreign Trade Policy replacing MEIS benefit. This much needed and awaited scheme has been announced by commerce ministry vide Notification No. 19/2015020 dated 17 August 2021 along with applicable rate of benefit as announced under Appendix 4R. Excerpts of the scheme is provided as under:

  • Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) has been added in Chapter 4 of the Foreign Trade Policy 2015-20 (FTP) (Para 4.54 to 4.59);

RoDTEP - Concept of text at canvas with stand and basket pen on wooden table

Scheme Objective and operating principles:

  • Scheme’s objective is to refund, currently un-refunded taxes / duties levied on goods / services used in production or distribution of exported product;
  • Scheme will operate in a budgetary framework for each financial year and necessary calibrations and revisions shall be made to the scheme as and when required;
  • such benefit shall be allowed under the limit of prescribed limit and no provision for remission of arrears or contingent liabilities is permissible under the scheme;
  • A rebate would be granted to eligible exporters at a notified rate as a percentage of FOB value (as notified under Appendix 4R) – efforts will be made to review the RoDTEP rates on an annual basis and to notify them well in advance before beginning of a financial year;
  • Rebate allowed is subject to the receipt of sale proceeds as per time prescribed by RBI. The rebate will not depend on the realisation of export proceeds at the time of issue however, such safeguards to be taken for rebates granted where export proceeds are not realised;

Mechanism for issuance of Rebate:

  • Scheme would be implemented through end to end digitisation and rebate would be granted in form of a transferable duty credit / electronic scrip (e-scrip);
  • Which will be maintained in an electronic ledger;
  • Necessary rules and procedures including manner and time period of application, documentation, sampling procedures, record keeping, etc. shall be notified by CBIC separately;
  • Necessary provisions for recovery of rebate where export proceeds not realised or wrongly claimed rebate, suspension / withholding in case of fraud, imposition of penalty will be built suitably by CBIC;
  • The Scheme will take effect for Export from 1 January 2021 for eligible exporters. For the category of exports where manufacturing is done under benefit of Advance license / DFIA, manufacturing under EOU, FTZ or SEZ shall be decided later.

Ineligible supplies / items / categories under the scheme:

1. Export of imported goods covered under para 2.46 of FTP;

2. Export through transhipment (exports originating in third country);

3. Export products which are subject to Minimum Export price or export duty;

4. Products which are restricted for export under Schedule 2 of Export Policy in ITC(HS);

5. Products which are prohibited for export under Schedule 2 of Export Policy in ITC(HS);

6. Deemed Exports;

7. Supplies from DTA to SEZ / FTWZ;

8. Products manufactured in EHTP and BTP;

9. Products manufactured party / wholly in warehouse as provided in Section 65 of the customs act;

10. Products manufactured or exported in discharge of export obligation against Advance Authorisation / DFIA;

11. Products manufactured / exported by EOU;Products manufactured / exported by SEZ / FTZ / EPZ;

12. Products manufactured / exported availing the benefit of Notification No. 32/1997 – Customs dated 1 April 1997;

13. Exports from non-EDI port;

14. Goods taken into use after manufacture

Inclusion of Exports made by ineligible categories listed at No. 10, 11 and 12 (Advance license, DFIA, EOU, SEZ, etc), would be decided based on the recommendations of the RoDTEP committee.

Nature of Rebate: E-scrips would be used only for payment of Basic Customs Duty.

Monitoring , Audit and Risk Management System: A monitoring and Audit system will be put in place by CBIC for verification of documents and records on physical basis. Sample cases for physical verification will be drawn objectively on risk and other relevant parameters.

We have linked copies of both scheme and rates below. We shall keep you posted on the further updates of the scheme.

Notification No. 19/2015-2020 dated 17 August 2021 with Appendix 4R

Feel free to connect if you require any additional information / clarification in this regard.

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Amrin has 8+ years experience in the field of Indirect Tax advisory and compliance including working with KPMG before she commenced her journey as an entrepreneur. In her new role from May 2017, she has been providing Business and Tax Advisory Services to various organisations. Her skill sets to View Full Profile

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4 Comments

    1. Amrin says:

      Hi Vishen, there is no such condition on non-availment of ITC. Also, the scheme has been introduce to compensate tax credit losses (which means in-eligible credits) and hence, eligible credits should be allowed along with RoDTEP benefit.

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