RoDTEP Scheme Guidelines
Guidelines of Remission of Duties or Taxes on Export Product (RoDTEP) Scheme
Directorate General of Foreign Trade (DGFT) has notified the RoDTEP Scheme Guidelines vide a Notification dated 17th August 2021. Under the RoDTEP, various Central and State duties, taxes, and levies imposed on input products, among others, would be refunded to exporters. With this notification, DGFT announced the rates of tax refunds on Exported Products. The current article briefs the RoDTEP Scheme Guidelines in detail.
Synopsis of Notification
Ministry of Commerce and Industry has notified RoDTEP Scheme Guidelines and Rates (Remission of Duties and Taxes on Exported Products).
- The RoDTEP for zero-rating of exports will boost our exports & competitiveness in the global markets.
- The rates of RoDTEP will cover 8555 tariff lines.
- Remission of Duties and Taxes on Exported Products (RoDTEP) is one such reform, based on the globally accepted principle that taxes and duties should not be exported, and taxes and levies borne on the exported products should be either exempted or remitted to exporters.
The RoDTEP Scheme allows exporters to receive refunds on taxes and duties that are not exempted or refunded under any other scheme.
- Under the scheme, exporters receive refunds on the embedded taxes and duties previously non-recoverable.
- The chief aim of the scheme is to boost the export of goods that were poor in volume
- The scheme provides for rebates of Central, State, and Local duties/taxes/ levies which are not refunded under any other duty remission schemes.
- The RoDTEP scheme can be said to be a combination of the MEIS and the Rebate of State and Central Taxes and Levies (RoSCTL).
- Under this scheme, a refund would be claimed as a percentage of exports’ Freight On Board (FOB) value.
RoDTEP Scheme Objective
The objective of the RoDTEP Scheme is as follows:
- The Scheme’s objective is to refund, currently un-refunded:
- Duties/taxes/levies, at the Central, State, and local level, borne on the exported product, including prior stage cumulative indirect taxes on goods and services used in the production of the exported product and
- Such indirect Duties/taxes/levies in respect of the distribution of the exported product.
The rebate under the Scheme shall not be available in respect of duties and taxes already exempted or remitted or credited
Features of the RoDTEP Scheme
The following are the salient features of the RoDTEP Scheme.
- Remission of taxes/duties/levies
- It covers duties and taxes levied at the central, state and local levels that are not reimbursed under any other mechanism. Items that were under the MEIS and the RoSCTL are shifted to the RoDTEP.
- Automated refund system
- Refunds will be issued to exporters as transferable duty credit/electronic scrips and maintained in an electronic ledger.
- This can be used to pay basic customs duty on imported goods. The credits can also be transferred to other importers.
- Speedy clearance through digitalization
- Faster clearance through a digital platform will be facilitated through a monitoring & audit mechanism, with an IT-based risk management system that would physically verify the exporters’ records.
- Scheme for all sectors
- The scheme is applicable across all sectors.
Eligibility for RoDTEP Scheme
The following section discusses the eligibility to avail of benefits under the scheme.
- All sectors are covered under the scheme. Labor-intensive sectors will be accorded priority.
- Both manufacturer exporters and merchant exporters (traders) are eligible for the scheme.
- There is no turnover threshold for availing of benefits under the scheme.
- The exported products should have India as their country of origin to be eligible for benefits under the scheme.
- Special Economic Zone Units and Export Oriented Units are also eligible.
- The scheme also applies to goods that have been exported via courier through e-commerce platforms.
Note: Re-exported products are not eligible under this scheme.
Rates under the Scheme
The determination of ceiling rates under the Scheme will be done by a Committee in the Department of Revenue/Drawback Division with the suitable representation of the DoC/DGFT, line ministries, and experts, on the sectors prioritized by the Department of Commerce and Department of Revenue.
The overall budget/outlay for the RoDTEP Scheme would be finalized by the Ministry of Finance in consultation with the Department of Commerce (DoC), taking into account all relevant factors.
Rates of Tax Refunds
Under the Scheme, a rebate will be granted to eligible exporters at a notified rate as a percentage of FOB value with a value cap per unit of the exported product, wherever required, on the export of items that are categorized under the notified 8-digit HS Code.
For certain export items, a fixed quantum of rebate amount per unit may also be notified.
Rates of rebate/value cap per unit under RoDTEP will be notified as per the APPENDIX 4R: Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP)
In addition to necessary changes that may be brought about because of budget control measures mentioned above, efforts would be made to review the RoDTEP rates on an annual basis and notify them well in advance before the beginning of a financial year.
Ineligible Supplies/ Items/Categories under the Scheme
The following categories of exports/ exporters are not eligible for rebate under RoDTEP Scheme:
- Export of imported goods covered under paragraph 2.46 of FTP
- Exports through trans-shipment, meaning thereby exports that are originating in the third country but trans-shipped through India
- Export products that are subject to Minimum export price or export duty
- Products that are restricted for export under Schedule-2 of Export Policy in ITC (HS)
- Products that are prohibited from export under Schedule 2 of Export Policy in ITC (HS).
- Deemed Exports
- Supplies of products manufactured by DTA units to SEZ/FTWZ units
- Products manufactured in EHTP and BTP
- Products manufactured partly or wholly in a warehouse under section 65 of the Customs Act, 1962 (52 of 1962)
- Products manufactured or exported in discharge of export obligation against an Advance Authorization or Duty-Free Import Authorization or Special Advance Authorization issued under a duty exemption scheme of relevant Foreign Trade Policy
- Products manufactured or exported by a unit licensed as a hundred percent Export Oriented Unit (EOU) in terms of the provisions of the Foreign Trade Policy
- Products manufactured or exported by any of the units situated in Free Trade Zones or Export Processing Zones or Special Economic Zones
- Products manufactured or exported availing the benefit of the Notification No. 32/1997-Customs dated 1st April 1997.
- Exports for which electronic documentation in ICEGATE EDI has not been generated/ Exports from non-EDI ports
- Goods which have been taken into use after manufactureRoDTEP Scheme Guidelines
Documents Required to Apply for RoDTEP Scheme
- Shipping Bills
- Electronic Bank Realization Certificate (eBRC)
- Digital Signature Certificate (DSC) – Class 3
- Registration cum Membership Certificate (RCMC)
Procedure to Apply for RoDTEP Scheme Online
The process of applying for the RoDTEP scheme is quite similar to that of the Rebate of State & Central Taxes and Levies (RoSCTL). The following steps can be implemented to apply for the RoDTEP scheme:-
- Log on to the ICE Gate website (icegate.gov.in)
- File an application using a Class 3 Individual type Digital Signature Certificate.
- Attach all the required documents mentioned above and link them to the application.
Procedure to Issue Duty Credit for Goods Exported under the RoDTEP Scheme
CBIC notifies the procedure to issue duty credit for goods exported under the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) vide Notifications No. 76/2021- Customs (N.T.) dated 23rd September 2021. The duty credit under RoDTEP Scheme will be issued instead of remission of any duty chargeable on any material used in the manufacture of goods meant for exports, and where such tax is not exempted, remitted, or credited under any other scheme.