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The RoDTEP Scheme came into existence because the USA filed a complaint against India at the World Trade Organization (WTO). USA argued that export subsidies like the MEIS scheme given by GOI give undue benefits to Indian exporters and it is against the WTO rules. Consequently, India lost the case at WTO, and the ruling was in favor of the USA. It meant that now India had to stop the MEIS scheme and come up with a new WTO-compliant scheme to help Indian exporters. Hence, the Finance Minister in her Budget Speech on 1st February 2020 announced that the Scheme for Remission of duties and taxes on export products would be launched. Consequently, the RoDTEP Scheme was approved by the Union Cabinet on 13th March 2020 and it came into effect on 1st January 2021 and will be until 2025.
Under the RoDTEP Scheme, the exporters can get the refund of embedded central, state, and local duties or taxes that were not getting refunded under any of the existing schemes earlier. It is expected that the scheme will significantly impact India's competitiveness in the international market in the next 5 to 10 years and would work on the principle that taxes/duties should not be exported, It should either be exempted or remitted to exporters. Implementation of the RoDTEP Scheme is done by the schemes earlier. It is expected that the scheme will significantly impact India's Customs, Icegate Portal. On 17th August 2021, Government released the guidelines and benefit rates under RoDTEP Scheme for 8555 tariff lines. The rebate rate varies from 0.5% to 4% of FOB value with a cap on value per unit on products where it is required. Below is a diagram showing the history of export promotion schemes, for a better understanding of their evolution.
Currently, only the GST and the import customs duties levied on inputs required for the manufacturing of export products are either exempted or refunded in some or another way. Input tax credit (ITC) of GST paid is available, and also if exported on payment of duty then IGST refund can be claimed. Import Custom duties on raw materials are exempted through the Advance Authorization scheme or refunded through the Duty Drawback scheme. However, still, there are many duties and taxes levied by the Central and State government which are not refunded. It adds up to the final cost of resultant products and makes Indian products uncompetitive in the global market.
The RoDTEP Scheme aims to refund all those hidden taxes and levies, For example:
The Scheme will ensure that the Exporter only exports goods and services, not any kind of taxes, and the RoDTEP Scheme would cover all indirect Central & State taxes that are not reimbursed in any existing scheme.
The RoDTEP Scheme is WTO compliant since it is not an additional Incentive, it is just the refund of hidden taxes. The RoDTEP Scheme will help the exporters to meet international standards and make their goods cost-competitive in the international market by assured duty benefits.
The RoDTEP Scheme would operate in a budgetary framework for each financial year and a 12,400 Cr outlay has been announced for the FY 2021-22.
The government has extended the RoDTEP scheme to Chemical, Pharma & Iron & steel Exporters covering chapters 28,29,30 & 73 of ITC HS code.
The Rate of Incentive is in the range of 0.5% to 2%, which varies as per the ITC HS Code.
The majority of the Items are given 0.8% Incentive.
As per the current notification, this scheme will only be applicable for all Exports made after 15.12.2022 till 30.09.2023
We request all our Clients, Kindly Please make all the necessary declarations at the time of Filing Shipping Bills & Do not forget to tick YES for RoDTEP.
To claim RoDTEP Incentives, Exporters need to get a Class - 3 Digital Signature along with mandatory Registration on the Icegate Website.
Note - Please note that E-brc is not mandatory for RoDTEP application, however, we advise all our clients to first obtain e-brc and then only apply for RoDTEP, in order to avoid any notices in the future, if any e-brc is not generated.
The last date of application for each shipping bill would be a maximum of 1 year from the Shipping Bill date or the scroll generation date whichever is later.