The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme is a combination of the current Merchandise Export from India Scheme (MEIS) and Rebate of State and Central Taxes and Levies (RoSCTL). It will be launched to augment India’s exports by allowing reimbursement of taxes and duties, which are not exempted or refunded under any other scheme in accordance with World Trade Organization (WTO) norms.
On 14th September 2019, the Government of India (GOI) announced the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. A combination of the current Merchandise Export from India Scheme (MEIS) and Rebate of State and Central Taxes and Levies (RoSCTL), RoDTEP was launched to augment India’s exports. This was done with the strategy of allowing reimbursement of taxes and duties, which are not exempted or refunded under any other scheme in accordance with World Trade Organization (WTO) norms. RoDTEP is expected to be notified from January 2021, though according to media reports, government is mulling the idea of extending the validity of the Merchandise Exports From India Scheme (MEIS) to March 31, 2021.
RoDTEP is essentially aimed at reimbursing even embedded taxes (that are not subsumed by the GST) paid on inputs consumed in exports.
Key benefits of RoDTEP
- The scheme is in compliance with the WTO trade norms, unlike MEIS.
- It can offer a seamless flow of economic benefit from the government.
- It proposes to encompass certain taxes, such as state taxes on power, oil, water and education cess, are not included.
- With assured duty benefits by GOI, it will enhance more competitiveness in the foreign markets.
- RoDTEP will help exporters meet international criteria and augment business growth.
- It enables reimbursement of duties and taxes (such as mandi tax, VAT and central excise on fuel, etc.), which are levied at central, state and local level and are not refunded under any other mechanism.
- Automated refund system in the form of transferable duty credit/ electronic scrips.
A monitoring and audit mechanism to physically verify the records of the exporters. Not only will this usher in greater transparency, it will also enable faster clearance through digital platform.
Comparison between RoDTEP, MEIS and RoSCTL
|Incentive scheme||Incentive on exports of goods in form of transferable scrips||Rebate of certain central and state taxes and levies issued in the form of duty credit scrips||Refund of indirect taxes on inputs used in the manufacture of exported product that are not being currently reimbursed in any other existing schemes|
|WTO compliant||Currently under dispute whether it is compliant or non-compliant with WTO norms||Compliant with WTO trade norms||Compliant with WTO trade norms|
|Application form||Form ANF-3A (to be filled online on DGFT portal)||Form ANF 4R (to be filed online on DGFT portal)||Yet to be notified|
|Incentive||2-5% of realised FOB value of Exports in free foreign exchange or FOB value of exports as per shipping bill, whichever is lower||1-4% based on FOB value of exports in foreign currency||Product based % way of reward (to be notified)|
|Mode||Issued in the form of transferable scrips (physical copy)||Issued in the form of transferable scrips in paperless mode||To be issued in the form of transferable duty credit/ electronic scrip, which will be maintained in electronic ledger|
|Transferable||Transferable in open market||Transferable in open market||Transferable in open market|
Source: Grant Thorton
Who is eligible under RoDTEP?
- The scheme will encompass all sectors (including textiles), with priority being given to labour-intensive sectors which are enjoying benefits under MEIS Scheme at 2%, 3% or 5% of the export value from 1 January 2021.
- Merchant exporters (traders) and manufacturer exporters can avail benefits under the scheme.
Goods exported through e-commerce platforms via courier are also included. But country of origin of the exported products should be India; though re-exported products are not eligible.