The Remission of Duties or Taxes on Export Products (RoDTEP) is a scheme that has recently been rolled out by the government of India, to provide reimbursements of any tax, duty, or levy paid by the exporters while exporting goods from India.
All the duties or taxes charged at the manufacturing and transportation stage, that were previously not refunded under any of the existing schemes will now be covered under this scheme. The RoDTEP scheme has replaced the Merchandise Exports from India Scheme (MEIS) as the latter wasn’t compliant with the World Trade Organisation’s (WTO) trade norms.
Who is Eligible for the RoDTEP Scheme?
- The RoDTEP scheme which has been in effect from January 1, 2021, applies to only those goods and not services that are manufactured locally and exported from India.
- All sectors, including the textiles sector, may enjoy the benefits of the RoDTEP Scheme. Labor-intensive sectors that enjoy benefits under the MEIS Scheme will be given a priority.
- Re-exported goods i.e. goods that are originally produced outside India but then are transported via India, are not covered under the scheme. The scheme is omni-sectoral i.e. it covers goods from all the sectors so that the balance is maintained.
- Manufacturer exporters, as well as merchant exporters or traders, can avail of the benefits of the RoDTEP scheme.
- There is no maximum or minimum turnover threshold to claim the benefits under the scheme.
- Special Economic Zone Units and Export Oriented Units are also eligible to claim the benefits under this scheme.
- The scheme also covers the goods that are exported through e-commerce platforms via courier services.
Features of RoDTEP Scheme
- All the cumulative indirect taxes such as the Value Added Tax (VAT), Central Excise tax on fuel for generating electricity, mandi tax, etc. shall be reimbursed under the RoDTEP scheme.
- RoDTEP scheme aims to achieve the goal of ensuring zero-rating for all export products.
- A high-end technology called Risk Management System (RMS) will be used to verify and track the records of all the exporters.
- The tax rebate will be a fixed percentage of the total Freight On Board (FOB) value of the export which will be stored on an electronic ledger.
- Manufacturers from all the sectors including textile and other labor-intensive sectors can avail of the benefits under the RoDTEP scheme.
Benefits of RoDTEP Scheme
- WTO Compliant: Unlike the MEIS scheme, the RoDTEP scheme is compliant with the trade norms set up by the WTO.
- Technologically Advanced: Input credits under the RoDTEP scheme will be maintained on an electronic credit ledger in the form of transferable credit scrips. Moreover, risk-based profiling of the shipping bills will be done by RMS that will determine whether or not the bills need additional physical intervention by an officer.
- Multi-Sectoral: The RoDTEP scheme applies to goods across all the sectors so that there is uniformity in the country’s exports.
- As announced by the Ministry of Finance, a fully automated refund module will be created which will be available to the public as well as the private sector. This will greatly help in eliminating the menace of double taxation and also bring down the GST tax refund claims and claims for deemed exports.
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)
Availing benefits under RoDTEP Scheme
The ICEGATE portal (Indian Customs Electronic Gateway) will contain the details regarding the credits availed by the exporter. At the port, the exporter must indicate in the shipping bill the details regarding the claim of the RoDTEP benefit with regard to a particular item of export and generate a credit scrip for it. These credit scrips are then used to pay basic customs duties, claim rebates or can be transferred to other importers, as the case may be.
The process for the generation and claiming of scrips under the RoDTEP scheme are as follows-
- The exporter should make a declaration of the claim for RoDTEP in the shipping bill.
- Once the Export General Manifest (EGM) is filed, the claim will be processed by the Customs.
- After processing the claim, a scroll with all individual Shipping Bills for the admissible amount will be generated and available in the users account at ICEGATE portal.
- The exporter should log in to the ICEGATE portal and create a RoDTEP credit ledger account.
- After the RoDTEP credit ledger account is created, the exporters can log in to their accounts and generate scrips by selecting the relevant shipping bills.
- Once, the scrips are generated, the refund will be credited and reflected in the exporter’s ledger account and will be available for utilisation in payment of the eligible duties and during imports or for transfer to any other importers.
Appendix 4R - List of eligible RoDTEP export items, rates and per unit value caps