The Indian government and the office of DGFT have set up a committee chaired by former secretary G K Pillai, former CBEC member Y G Parande and former customs member Gautam Ray to determine the RoDTEP rates for exports from special economic zones (SEZs), export-oriented units(EOUs), and Advance Authorisation (AA) following continuous requests from the industry. SEZs are the border areas where trade laws are different, and the EOUs are the sectors allowed to be set up to export entire productions or services, and AA being the duty-free input which are physically integrated into the export products.

Following the announcement in August, the tax refund rates of Remission of Duties and Taxes on Export Products (RoDTEP) were published for 8,555 products including marine goods and dairy items, and 12,454 crores were sanctioned for the refunds under the RoDTEP scheme for the financial year, which SEZs and EOUs were left out of. 

In the latest announcement, the representatives of trade and industry were requested to submit their application through the export promotion councils and industry associations to the RoDTEP committee directly.

Need for the RoDTEP Scheme:

For India to stay within the WTO norms following the ruling of the dispute panel, the RoDTEP scheme was introduced after withdrawing The Merchandise Exports from India Scheme, Electronic Hardware Technology Parks Scheme, and many more.

The RoDTEP scheme assures:

– Refunds of the Mandi Tax, Vat, Coal cess, and Central Excise Duties on fuel.

– All the elements under MEIS and RoSTCL are now directly under the purview of the RoDTEP Scheme.

– Adaptation of an automated system of credit in the forms of electronic scrips.

– Quick Verification through the portal.

–  Uniformity across the sectors, including the textile sector. Additionally, a dedicated committee was set up to decide the sequence of introduction of the scheme across different sectors.

Eligibility to Obtain RoDTEP Scheme:

– All sectors including textile industries are eligible to benefit from the scheme, but SEZs, EOUs, and AA exports were excluded in the August announcement – which is being considered over in the latest announcement by DGFT. 

– Labour-Intensive sectors are given priority.

– There is no turnover threshold to apply.

– Re-exported products are not eligible.

– The country of origin of the products must be India.

– E-Commerce exports are also eligible for the RoDTEP scheme. 

Procedure to availing the Benefits:

The process to generate and claim the scrips under the RoDTEP scheme are as follows:

– The exporter is expected to generate a declaration of the claim to the RoDTEP.

– The claim will be processed by customs once the EGM is filed.

– A list with all admissible bills will be generated at the ICEGATE portal.

– A RoDTEP credit ledger account is to be created by the exported after the generation of bills.

– Following the RoDTEP credit ledger account creating, the exporter can now generate scrips by selecting appropriate bills.

– Refund will be credited in the exporter’s ledger account for utilization in payment of duties and during import.

Difference Between MEIS and RoDTEP Scheme:

1. MEIS used to offer incentives on exported products.

RoDTEP offers a refund of taxes and duties.

2. MEIS was not compliant with the WTO norms.

RoDTEP is compliant with WTO norms.

3. Exporters benefited under the MEIS scheme entitled to a 2-5% refund.

RoDTEP offers a 0.5% – 4.3% refund on taxes and duties depending on the sector.