On Tuesday, the Centre notified the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme rates and guidelines. The scheme will boost exports and competitiveness in the global markets. The notified rates of the RoDTEP scheme covers 8,555 tariff lines for identified sectors.
Under the RoDTEP scheme, the government grants a rebate to eligible exporters at the notified rates as a percentage of FOB (Freight on Board) value. The rebate is subject to a value cap per unit of the exported product on the export of items categorised under the notified eight-digit HS Code. The notified rates (as notified in Appendix 4 R) under the RoDTEP scheme for several sectors include the rate at 0.5%, 1.4%, 2.4% and 4%.
However, the government may notify a fixed quantum of rebate per unit for certain export items. There will be efforts to review the rebate rates annually and notify them before the beginning of the financial year. The rebate given is subject to the receipt of sale proceeds within the time provided under the Foreign Exchange Management Act, 1999.
The rebate would not depend on the realisation of export proceeds at the time of its issue. However, adequate safeguards to prevent misuse for non-realisation and other improvements in operation under IGST, drawback scheme, and GST refunds relating to exports would be applicable for the claims under RoDTEP.
The scheme’s objective is to refund the currently un-refunded taxes, duties or levies at the state, Central, and local level, borne on the exported products. The refund includes un-refunded prior stage cumulative indirect taxes on services and goods used to produce and distribute exported products.
However, the rebate under the RoDTEP scheme is not available regarding taxes and duties already remitted, exempted or credited. The scheme’s implementation would be through end to end digitisation of issuance of rebate amount in the form of a transferable electronic scrip (e-scrip) or duty credit maintained in an electronic ledger by the Central Board of Indirect Taxes and Customs (CBIC).
The CBIC will notify the necessary procedures and rules regarding the grant of the RoDTEP claim and implementation issues, including the period for application, manner of application, and other matters on an IT-enabled platform. The e-scrips would be used only to pay customs duty under the First Schedule to the Customs Tariff Act, 1975, i.e. the basic customs duty.
The RoDTEP scheme covers employment-oriented sectors like leather, marine, agriculture, gems and jewellery, etc. It will also support other sectors like automobiles, electrical/electronics, plastics, machinery, etc. The RoDTEP and RoSCTL cover the entire value chain of textiles.
The government announced Rs.12,400 crore outlay for the RoDTEP export promotion scheme on Tuesday. The RoDTEP scheme came into effect on 01.01.2021, but the government had not notified the rebate rates and guidelines. The exporters were awaiting the notification of rebate rates to claim refunds on taxes, duties or levies for the exported products. The announcement of the rebate rates and the scheme guidelines will help the exporters to claim refunds for their exports.
For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@cleartax.in
I am an Advocate by profession. I interpret laws and put them in simple words. I love to explore and try new things in life.
