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RoDTEP Scheme

KEY THINGS TO KNOW ABOUT RoDTEP Scheme

OVERVIEW

The US filed a complaint against India’s key export subsidy schemes in the WTO (World Trade Organisation), claiming they harm the American workers. India lost the case at WTO, and the ruling was in favour of the USA. A dispute panel in the WTO stated that the export subsidy schemes like MEIS scheme provided by the Government of India give undue benefits to Indian exporters and violate the provisions of the trade body’s norms.  It meant that now India had to come up with a new WTO compliant scheme. The Finance Minister in her Budget Speech on 1st February 2020 had announced that the Scheme for Remission of duties and taxes on export products would be launched. This led to the birth of the RoDTEP Scheme. Consequently, the RoDTEP Scheme was approved by the Union Cabinet on 13th March 2020 and it came in effect from 1st January 2021 and will be until 2025.

WHAT IS  RoDTEP SCHEME?

RoDTEP stands for Remission of Duties and Taxes on Export Products. It is a new programme that came into effect on January 1st, 2021, and was created to replace the current MEIS programme (Merchandise Exports from India Scheme). The scheme would make sure exporters are to be reimbursed the taxes and duties paid by them and built into their export price but not refunded to them under any other scheme. 

 

By compensating Indian exporters for the embedded and non-refunded taxes that were included in the price of the export goods and negatively impacted their ability to compete on the global market, the government hopes to level the playing field for them. The programme was implemented with the goal of increasing exports, which had previously been rather low in volume.

KEY FEATURES AND BENEFITS

Refund of taxes and duties, previously unrefundable: Such as the fuel and toll taxes incurred during the export items' transportation, the state tax on the electricity used during their manufacturing, the stamp tax incurred during the import-export process, the APMC's Mandi charges, and others.

 

WTO compliant scheme: The RoDTEP is the WTO compliant policy that will aid exporters in adhering to international standards and lowering the cost of their products on the global market through guaranteed duty benefits.

 

Uniform, multi-sectoral scheme: RoDTEP covers various industries, including the textiles industry, to maintain uniformity throughout all fields. A dedicated committee is to decide when and  what degree of benefit is to be extended to each sector, and such related matters.

 

Digital / technology-driven: The introduction of the digital platform has made the clearance process faster and simpler. An IT-based risk management system has also been set up for the verification of the records of the exporters. The actual rebate is kept on an electronic ledger as transferable electronic scrips. 

Automatic Tax Assessment: To avoid double taxation, tax assessment is set to become fully automatic under the RoDTEP scheme.

 

The RoDTEP scheme rates of rebate vary from 0.5% to 4.3% of the FOB value of the exported products with a max value cap per exported product unit.

ELIGIBILITY TO OBTAIN BENEFITS

  • All sectors, including the textiles sector, may enjoy the benefits of the RoDTEP Scheme. Priority will be given to labor-intensive sectors that enjoyed benefits under the MEIS Scheme.

  • Manufacturer exporters and merchant exporters (traders) 

  • No particular turnover threshold is mentioned to claim the RoDTEP.

  • Re-exported products are not eligible under this scheme.

  • The exported products need to have the country of origin as India.

  • Special Economic Zone Units and Export Oriented Units are also eligible to claim the benefits.

  • Issued in the form of transferable duty credit or electronic scrips which will be maintained via an electronic ledger.

  • Where goods have been exported via courier through e-commerce platforms, RoDTEP scheme applies to them as well.

WHAT INDUSTRIES ARE COVERED UNDER THE RoDTEP SCHEME? 

​Employment-oriented sectors like marine, leather, gems and jewellery, agriculture, etc. It will also support other sectors like electrical/electronics, automobiles, machinery, plastics, etc. The RoDTEP and RoSCTL (Rebate of State and Central Taxes and Levies) cover the entire value chain of textiles.

HOW CAN WE ASSIST YOU TO CLAIM BENEFITS UNDER THE RoDTEP SCHEME?

We are a group of highly motivated DGFT experts who have been offering these services for many years. We want to remain on top of the news, grasp new schemes and all the policies that go along with them, recognise the advantages for exporters and importers, and simplify the policies so that our clients can understand them. Our professionals at YKG Corp carry out the following duties for you:

  • Guidance would be provided about the declarations that have to be there in shipping bills to avail the maximum benefits under various export promotion schemes given in new foreign trade policy.

  • Assistance in document preparation, we understand the importance of accurate documentation for fast processing.

  • ICEGate registration and Digital signature preparation.

  • Creation of RoDTEP Credit Ledger account.

  • Application on ICEGate to avail the benefits under RoDTEP.

  • Regular follow-up with Custom and DGFT for the licence.

  • We complete the entire process in a time bound manner.

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