RoDTEP Scheme ( Remission of Duty and Tax on Exported Product ) is a government scheme that is being implemented to assist Indian exporters by reimbursing the hidden tax and duty that are not refunded under any other scheme. It was enforced on 1 st January 2021, and it replaces the previous MEIS (Merchandise Exports from India Scheme), which was scrapped because of WTO compliance.
The primary target of the RoDTEP Scheme will be to ensure that the cost responsibility on the exporters is minimized so as to make the Indian exports competitive in the global market.
In the process of manufacturing and export, the exporters pay several indirect taxes, which include electricity duty, mandi tax, VAT on fuel, stamp duty, and any other embedded taxes. Such expenses were not reimbursed according to the past export incentive policies. This led to increased cost of production by exporters,s thus lowering their competitiveness in the world market.
The
The RoDTEP Scheme was formed to correct this situation by offering refunds on these hidden taxes so that the goods that are exported to other countries are affordable.
Key Features of the RoDTEP Scheme
- Embedded taxes and duties could be refunded where they are not included in other schemes.
- An export incentive mechanism that is WTO-compliant.
- E-credits of duty are issued in the form of e-scrips.
- Usable in various export industries.
- Information transfer via the ICEGATE portal.
In this scheme, the exporters benefit by way of electronic duty credit scrips (e-scrips). These credits may be applied to paying Basic Customs Duty (BCD) on imported goods or transferred to other immigrants.
Eligibility Criteria
The RoDTEP Scheme applies to:
- Manufacturer exporters
- Merchant exporter
- MSMEs and large businesses
- Exporters with a valid IEC (Import Export Code)
The benefit applies to notified goods and certain HS codes. The exporter needs to make a declaration about claiming the RoDTEP benefit while filing the shipping bill.
How Does the Claim Process Work?
- The exporter makes the RoDTEP claim declaration in the shipping bill.
- After the realization of the export, the system generates the claim automatically.
- The duty credit is sent electronically to the exporter’s ledger.
- The credit can be utilized or transferred as per the business requirements.
The whole process is electronic, and there is no paperwork.
Benefits of the RoDTEP Scheme
- Reduction in export cost
- Enhanced price competitiveness in international markets
- Refund of previously non-refundable taxes
- Incentivization of MSME exporters
- Stimulation of overall export growth in India
Conclusion
The RoDTEP Scheme is an important component of the overall export framework in India. By refunding the hidden duties and taxes, the RoDTEP Scheme helps in reducing the cost of exports and makes India compliant with international trade norms. For exporters who wish to grow globally, the RoDTEP Scheme is a great profit-making opportunity.
