RoDTEP Scheme: Rates, Guidelines, Eligibility, Features, Benefits

RoDTEP Scheme: RoDTEP stands for the remission of duties and taxes on export products. This new program will go into effect on January 1, 2021. The Merchandise Exports from India Scheme (MEIS) was superseded by it. This program ensures payment to exporters who were previously unable to recoup embedded taxes and duties. The intention behind its implementation was to boost exports, which had been relatively low up until then.

What is RoDTEP?

The Government of India officially unveiled the scheme through a press release on January 13, 2020. The program is a component of a bigger initiative to boost exports, trade, and government revenue in India. The six-month (or 12-month) doubled duty-free export increase implemented by the Modi government preceded the initiative’s launch. The program builds upon the Merchandise Exports from India (MEIS) and ROD/VAT Remission Scheme, which were previously provided to exporters in different categories. These are now, though, being made as a single, integrated transaction.

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Need for the RoDTEP Scheme

In the World Trade Organisation (WTO), the US had contested India’s main export subsidy programs on the grounds that they were detrimental to US workers. A WTO dispute panel ruled against India, finding that the country had broken the trade body’s rules by offering export subsidies. The panel also suggested ending the export assistance programs. Exporters who were previously unable to recover embedded taxes and duties will now receive payment thanks to this program.

Restarting a few of the export subsidy programs was proposed:

• India’s exports of merchandise Plan Export-focused Units Technology Parks for Electronics Hardware Scheme
• Parks for Biotechnology Plan for Promoting Capital Goods Exports Special Economic Zones (SEZ) Scheme Tariff-Free Imports for Exporters Programme

Features of the RoDTEP Scheme

Refund of the previously non-refundable duties and taxes

Under this particular scheme, there will be a refund of Mandi tax, VAT, coal cess, central excise duty on fuel, and so on. The RoDTEP Scheme now includes all of the items covered by the MEIS and the RoSTCL (Rebate of State and Central Taxes and Levies).

Automated system of credit

The compensation will be given in the form of tradeable electronic scrips. An electronic ledger will be used for this duty credit tracking and upkeep.

Quick verification through digitization

With the advent of the digital platform, clearance occurs considerably more quickly. Furthermore, a special committee will be established to make decisions on other pertinent issues, including how the scheme will be implemented in each sector in turn and the relative benefits each sector will receive.

Multi-sector scheme

To ensure uniformity throughout, RoDTEP covers all industries, including the textile sector. Additionally, a special committee will be formed to decide on other relevant matters, such as how the scheme will be implemented in each sector successively and how much benefit each sector will receive.

Eligibility to obtain benefits of the RoDTEP Scheme

• Every industry, including the textile industry, may profit from the RoDTEP Scheme. The MEIS Scheme will give preference to industries that benefit from a high labor force share.
• The advantages of this program are available to merchant exporters, traders, and manufacturers exporting goods.
• To be eligible for the RoDTEP, there is no specific turnover threshold.
• Please note that this program does not cover reexported products.
• The exported goods must have India as their country of origin in order to qualify for this scheme’s benefits.
• Export-oriented units and Special Economic Zone units are also qualified to receive benefits under this program.
• The RoDTEP program also extends coverage to goods exported via courier via online retailers.

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Availing benefits under RoDTEP Scheme

The Indian Customs Electronic Gateway, or ICEGATE, is the portal where exporters can access information about the credits they have received. In order to claim the RoDTEP benefit for a specific export item, the exporter must create a credit scrip at the port and include the necessary information in the shipping bill. These credit scrips can then be transferred to other importers and used to cover regular customs duties or submit rebate claims.

The procedures for generating and claiming scrips under the RoDTEP scheme are as follows:

• In the shipping bill, the exporter must declare their claim for RoDTEP.
• Following the filing of the Export General Manifest (EGM), Customs will handle the claim.
• After processing the claim, the user’s ICEGATE portal account will generate and make available a scroll that includes each specific Shipping Bill for the permitted amount.
• By visiting the ICEGATE portal, the exporter should create a RoDTEP credit ledger account.
• The exporters can generate scrips by selecting the appropriate shipping bills after logging into their accounts and creating the RoDTEP credit ledger account.
• Other importers may receive their refund, eligible duties may be paid during importation, or scrips may be made with the money. Additionally, the exporter’s ledger account will receive credit and reflect it.

The Indian government has not yet announced the rate of duty remission for goods covered by the RoDTEP scheme.

India extends the RoDTEP Scheme

• The Ministry of Commerce and Industry announced on December 7, 2022, that the RoDTEP programme will be extended for exports; the extension will take effect on December 15, 2022.
• Furthermore, the announcement stated that the program would now extend to exports of products from the chemical and pharmaceutical industries, as well as exports of iron and steel items covered by India Tariff Code-Harmonized System (ITC-HS) chapters 28, 29, 30, and 73.
• Appendix 4R contains the complete list of the 10,342 export items that are readable under the RoDTEP scheme. The complete list with detailed 8-digit tariff lines is available to view on the DGFT website.
• For goods exported up until September 30, 2023, the most recent rates (w.e.f. 16 January 2023) for this scheme list the increased rates for 65 HS codes for textiles and apparel, including lycra blended knitted fabric, cotton woven fabric, and even denim.

MEIS vs RoDTEP

MEIS	RoDTEP
1. Incentives available on the export of goods	The product percentage has not yet been communicated.
2. Not compliant with the WTO norms.	Adherent to WTO guidelines.
3. 2%-5% of the FOB (Free On Board) value of exports.	Product percentage has not yet been communicated.
4. distributed as tangible, transferable scrips.	Issued as electronic scrips that will be tracked by an electronic ledger or as transferable duty credits.

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FAQ’s

Q. Have the RoDTEP scheme rates been notified?

Ans-The RoDTEP scheme rates and guidelines were notified by the Central Government on August 17, 2021. The RoDTEP scheme has announced rates for a number of sectors, with rates at 0.5%, 1.4%, 2.4%, and 4% being among them. For some export goods, the government has not yet announced a set amount of the rebate per unit.

Q. Which industries fall under the purview of the RoDTEP Scheme?

Ans- The RoDTEP program covers industries that create jobs, such as agriculture, leather, marine, gems, jewelry, etc. In addition, it will help other industries like plastics, machinery, automotive, electrical, and electronics. The RoDTEP and RoSCTL (Rebate of State and Central Taxes and Levies) cover the whole textile value chain.

Q. Which industries are currently not eligible for the RoDTEP scheme?

Ans- Steel, organic and inorganic chemicals, pharmaceuticals, and steel are some of the most important industries that are currently not eligible for benefits under the RoDTEP scheme.

Q. What documentation is needed in order to apply for the RoDTEP Scheme?

Ans-The documents required to apply for RoDTEP Scheme:

• Shipping bills
• Electronic Bank Realisation Certificate
• DSC – Class 3
• Registration Cum Membership Certificate (RCMC)

Q. How long will the  RoDTEP scheme be in effect?

Ans- The RoDTEP programme went live on January 1, 2021. The RoDTEP programme will continue until 2025 when a new one will take its place. The RoDTEP program provides subsidies for all of India’s exports of goods.

Conclusion

There is a significant expectation that the plan will boost India’s revenue and exports. The program carries out the government’s intentions to boost export earnings and international trade, as demonstrated by the six months of exports that were free of taxes.

Because the RoDTEP scheme relieves exporters of the burden of paying taxes and duties on imported capital goods, it can help them reduce costs and increase efficiency, which in turn helps them provide better solutions for their customers.

Moreover, exporters won’t have to pay taxes or duties on imported capital goods. This helps avert circumstances in which the business must deal with problems brought on by inquiries about compliance. The two stages of the manufacturing process were completed abroad and in India, respectively.

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