The Government of India has launched various schemes to boost the export rates of the country. The RoDTEP Scheme is one such scheme that was launched to help exporters gain refunds on taxes and duties that were previously non-recoverable. The RoDTEP Scheme took over the Merchandise Exports from India Scheme (MEIS).
Understanding export policies and rules can be extremely puzzling. Amongst all the different schemes available, the Remission of Duties on Exported Products (RoDTEP) Scheme is a wonderful opportunity for exporters across the world. Irrespective of whether you are a seasoned exporter or someone who just began dabbling in the exporting world, RoDTEP helps everyone.
This blog details all there is to know about the RoDTEP Scheme, its benefits, and its features. It also explores its advantages, eligibility, and more.
The RoDTEP Scheme: Everything You Need to Know
The Remission of Duties or Taxes on Export Products (RoDTEP) Scheme is the cornerstone of the country’s export promotion efforts. It provides many crucial benefits to exporters that range over different sectors. Fundamentally, the RoDTEP Scheme strives to eliminate the financial burden the exporters carry by giving reimbursements for duties and taxes incurred during the process of exporting. This scheme represents a strategic move by India to incentivise the export activities of the nation. It helps in fostering economic growth and competitiveness in the global marketplace.
The Government of India chose to replace the MEIS with the RoDTEP Scheme due to several factors. These included compliance issues with the World Trade Organisation’s norms and limitations of trade that were within the framework of MEIS. The MEIS Scheme was also scrutinised because of its inadequacies and inconsistencies. The implementation of the RoDTEP shows a proactive approach to aligning the country’s export policies with global standards.
Cumulatively, this scheme is a representation of a major leap toward optimising export processes and fostering a good environment for exports in the nation. Through the perceivable financial advantages and addressing regulatory issues, this scheme aims to empower exporters and propel this country’s position in the worldwide marketplace.
Why is the RoDTEP Scheme Necessary?
The United States has challenged India and its key export subsidy schemes in the World Trade Organisation. They claimed that the export policies harmed the American workers and importers. The WTO then settled this issue through a dispute panel and ruled against India. They stated that the export subsidy programmes launched by the Government of India violate the norms of the trade body. The panel also recommended that these programmes must be withdrawn. This gave a new beginning to the world of Indian exports and led to the establishment of the RoDTEP Scheme. This is necessary to remain compliant with the WTO norms.
Listed below are some of the export subsidy programmes recommended to be withdrawn:
- Biotechnology Parks Scheme
- Export Promotion Capital Goods Scheme
- Special Economic Zones (SEZ) Scheme
- Duty-free Importers and Exporters Scheme
- Merchandise Exports from India Scheme
- Export-oriented Units Scheme
Exploring the Features of the RoDTEP Scheme
This scheme is designed to provide a detailed understanding of the support provided by the Indian government to the exporters. The scheme also aims at optimising the process of exports while enhancing competitiveness in the international market. Here are the different features of the RoDTEP Scheme:
- Reimbursement of Previously Non-Recoverable Duties and Taxes
Central excise duty, Coal cess, VAT, Mandi tax, etc., can be claimed as refunds under the RoDTEP Scheme. The items enclosed in the MEIS and RoSTCL Scheme are now under the RoDTEP Scheme.
- Streamlined Credit Automation System
Transferable electronic scrips are issued for the refunds. These duty credits are tracked through a ledger.
- Efficient Digitisation for Swift Verification
With the introduction of digitisation, digital platforms are introduced to ensure clearance at quicker rates. The exporter’s records will be verified with the help of an IT-based risk management system to ensure the accuracy and speed of the processing of the transaction.
- Cross-Industry Scheme Coverage
All sectors including textiles are covered under the RoDTEP Scheme. This is done to ensure uniformity in all areas. Moreover, a committee dedicated to determining the sequence of the processes will be set up across different sectors. They will also discuss what level of benefits will be provided for every sector and its related matters.
Eligibility for Accessing RoDTEP Scheme Benefits
To enjoy the benefits of the RoDTEP Scheme, you must fit the following criteria:
- Every sector inclusive of textiles will enjoy the advantages provided by the RoDTEP Scheme. Every sector inclusive of labor-incentive ones enjoys these benefits under the MEIS Scheme. They will also be prioritised.
- Traders and manufacturer exporters will be eligible to avail the benefits of the RoDTEP Scheme.
- The RoDTEP Scheme will not have any specific turnover threshold to claim the benefits.
- The products that are re-exported will not have the benefits of this scheme.
- The products must originate from this country to be eligible to obtain the benefits of this scheme.
- Those under the Special Economic Zones and the Export-Oriented Units are also eligible to claim the benefits of this scheme.
- The RoDTEP Scheme is also applicable to e-commerce businesses that ship goods via courier platforms.
Utilising Advantages Provided by the RoDTEP Scheme
The Indian Customs Electronic Gateway portal (ICEGATE Portal) will have all the necessary details relevant to the credits availed by an exporter. The export must produce the shipping bill and claims of the RoDTEP Scheme at the port. This enables the generation of credit scrips and the exporter can avail of refunds.
The generation and claiming process under this scheme is as follows:
- All declarations for the claims must be made by the exporter in the shipping bill.
- After the Export General Manifest (EGM) is filed, the claim will be processed by the customs authorities.
- Once the claim has been processed, a scroll accompanied by all the individual shipping bills for the admissible amount will be generated and available in the user account on the ICEGATE platform.
- A RoDTEP ledger must be created in the ICEGATE portal by the exporter.
- Post creation of the ledger, exporters log in to their accounts, and scrips must be generated with the relevant shipping bills.
- After the generation of scrips, the refund will be credited and reflected in the exporter’s account.
Differentiating Factors of MEIS and RoDTEP
The table below highlights the key differences between RoDTEP and MEIS.
| RoDTEP | MEIS |
|---|---|
| RoDTEP stands for Remission of Duties and Taxes on Export Products. | MEIS stands for Merchandise Exports from India Scheme. |
| This scheme enables the refund of taxes and duties that no other scheme reimburses. | This scheme provides incentives for goods for export. |
| It complies with the norms of the WTO. | Does not comply with the norms of the WTO. |
| The product-based percentage is yet to be notified. | About 2% to 5% of the fee on-board value of exports. |
| It is sussed in the form of transferable duty credit that will be trackable through an electronic ledger. | Tangible transferable scrips are issued. |
Conclusion
The Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme brings tremendous opportunity and hope for all exporters in the country. This scheme optimises the process of gaining reimbursements on taxes and duties that are levied during the process of exports. This process also strives to bolster India’s export competitiveness on an international stage. The RoDTEP Scheme also represents a big leap towards simplifying export procedures and empowering businesses to flourish at a global scale.
