The Department of Finance and the Department of Commerce are under active consultation to finalise the Remission of Duties and Taxes on Export Products (RoDTEP) scheme guidelines and finalise the remission rates for export items. The RoDTEP scheme replaced the Merchandise Exports from India Scheme (MEIS) from 1 January 2021.
The government launched the RoDTEP scheme to reimburse duties, taxes and levies at state, central and local levels. This scheme ensures that the exporters receive refunds on the embedded duties and taxes that were previously non-recoverable. The scheme aims to boost exports of goods which are relatively low in volume.
However, the government is yet to finalise the rates of remission under the RoDTEP scheme. The Home Textile Exporters’ Welfare Association approached the former Union Minister and Rajya Sabha MP, Shri. Suresh Prabhu urged the Department of Finance and Department of Commerce to declare the RoDTEP rates. The finalisation of the RoDTEP rates will support the exporters and fulfil the demand for their products in the US and Europe in the post-COVID period.
The Minister of Commerce and Industry, Shri. Piyush Goyal has stated to Shri. Suresh Prabhu said that a RoDTEP committee was set up in the Central Board of Indirect Taxes and Customs (CBIC) to determine remission rates for export items under the scheme. The Department of Commerce has recently received the report of the committee and the recommended rates, and it is under examination by the Department.
The government will soon finalise the RoDTEP scheme guideline and notify the rates for items, including the rates for the home textiles sector, as this scheme also covers the textile sector. The Federation of Indian Export Organisations (FIEO) has also sought the immediate release of the export benefits under the RoDTEP scheme. The refunds under the RoDTEP scheme will help the exporters to make profitable exports. Delay in the refunds will affect the profitability of the exporters due to the increasing interest burden.
Disruptions have taken place in the domestic supply chains and contraction in domestic demand because of the relapse of the COVID-19 pandemic in India. An improvement in exports will help for sound economic growth. The government can help increase exports by finalising the remission duties and releasing the legitimate dues of the exporters under the RoDTEP scheme quickly.
The government disabled the facility of filing an application under the MEIS for exports undertaken in 2019-20 and 2020-21. The government disabled the applications under MEIS due to the launch of the RoDTEP scheme. However, the government allowed applications under the MEIS for exports made in 2019-20 since the guidelines and remission rates were not finalised under the RoDTEP scheme.
The finalisation of the RoDTEP scheme remission rates will help exporters receive their dues for the exports made in 2020-21. There was an increase in the merchandise exports to $34.5 billion, increasing about 60% over the exports during March 2020. It is essential to sustain the growth momentum for the betterment of the economy.
The active consultation by the government for finalising the remission rates of export items under the RoDTEP scheme is a positive step. The finalisation of the remission rates and release of the dues to the exporters will help them sustain exports and increase economic growth.
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