RoDTEP Scheme Benefits Extended to Chemicals, Pharma and Steel Sectors

The Department of Commerce expanded the scope of Remission of Duties and Taxes on Exported Products (RoDTEP) to include chemicals, pharmaceuticals and iron and steel to increase shipments of these goods. The government will provide the benefits under the RoDTEP scheme to exports from 15 December 2022 to 30 September 2023. 

RoDTEP scheme refunds the embedded non-creditable state, central and local levies paid to exporters on inputs. The government notified the RoDTEP scheme on 1 January 2021 and replaced the Merchandise Exports from India Scheme (MEIS).

RoDTEP is based on the internationally accepted principle that duties and taxes should not be exported, and levies and taxes borne on the exported products should be remitted or exempted to the exporters. The scheme refunds or rebates the embedded state, central and local taxes or duties to the exporters that still need to be refunded or rebated. The Central Board of Indirect Taxes and Customs (CBIC) issues the rebate as a transferable electronic scrip.

The outlay for the scheme was Rs.12,454 crore in FY22. The government notified the rates under the RoDTEP scheme last year. Excluding the pharma, steel and chemicals sectors from the scheme’s ambit irked some exporters. The extension of the scheme to cover these sectors is likely to enhance export competitiveness.

An official statement stated that the decision to extend the RoDTEP scheme was a long-standing demand of the industry that has been accepted and would go a long way in boosting exports and competitiveness in the global markets, contributing to the overall economy and generating employment. The development comes against the backdrop of exports facing headwinds due to recession in some developed markets and supply chain disruptions triggered by the Russia-Ukraine conflict.

The expanded list of the eligible export items under the Appendix 4R of the RoDTEP scheme will increase from 8,731 export items (eight-digit tariff lines) to 10,342 export items (eight-digit tariff lines). According to the official notification, the financial implication of the extension of the scheme is around Rs.1,000 crore.

For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@clear.in

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