Legal Advisor

Introduction to RoDTEP Scheme

RoDTEP, an acronym for Remission of Duties and Taxes on Export Products, is a fresh initiative that commenced on January 1, 2021. Created as a successor to the former MEIS (Merchandise Exports from India Scheme), RoDTEP guarantees exporters reimbursement for previously non-recoverable embedded taxes and duties. This scheme’s inception aimed to reinvigorate exports, which had previously struggled with inadequate volume.

The Genesis of RoDTEP Scheme

Pressure from the United States prompted India to revisit its key export subsidy programs within the framework of the World Trade Organization (WTO). The US claimed these subsidies adversely affected American workers. The WTO dispute panel ruled against India, declaring that its export subsidy programs violated the trade body’s norms. Consequently, the panel recommended the withdrawal of these programs. This led to the creation of the RoDTEP Scheme to ensure India’s compliance with WTO regulations.

The Programs to be Withdrawn

Several prominent export subsidy programs faced recommendations for withdrawal, including:

• Merchandise Exports from India Scheme
• Export Oriented Units Scheme
• Electronics Hardware Technology Parks Scheme
• Bio-Technology Parks Scheme
• Export Promotion Capital Goods Scheme
• Special Economic Zones (SEZ) Scheme
• Duty-Free Imports for Exporters Scheme

Salient Features of RoDTEP

• Refunding Previously Unrecoverable Duties and Taxes

Under the RoDTEP Scheme, taxes such as Mandi tax, VAT, Coal cess, and Central Excise duty on fuel that were previously non-refundable will now be reimbursed. All items formerly covered by MEIS and RoSTCL fall under RoDTEP’s scope.

• Automated Credit System

Transferable electronic scrips will be provided for refunds, with their maintenance and tracking facilitated through an electronic ledger.

• Expedited Verification via Digitization

Introducing a digital platform streamlines clearance procedures, enhancing speed and accuracy. An IT-based risk management system verifies exporters’ records for swift transaction processing.

• All-encompassing Multi-sector Approach

RoDTEP covers all sectors, ensuring uniformity, with a dedicated committee overseeing its implementation across various sectors, benefit degrees, and related matters.

Eligibility for RoDTEP Benefits

• Wide-ranging Sector Inclusion

All sectors, including textiles, can benefit from RoDTEP. Labor-intensive sectors favored by the MEIS Scheme receive priority.

• Manufacturer and Merchant Exporters Eligible

Both manufacturer exporters and merchant exporters (traders) qualify for RoDTEP benefits.

• No Turnover Threshold

There’s no specific turnover requirement to claim RoDTEP benefits.

• Product Eligibility

Products must have India as their country of origin to avail RoDTEP benefits.

• SEZ Units and Export Oriented Units Eligibility

Special Economic Zone Units and Export Oriented Units can also claim RoDTEP benefits.

• E-commerce Inclusion

RoDTEP extends to goods exported via courier through e-commerce platforms.

Leveraging RoDTEP Benefits

The ICEGATE portal, India’s Customs Electronic Gateway, will host exporter credit details. At the port, exporters must declare RoDTEP benefits in the shipping bill, generating a credit scrip for the designated item. These scrips pay customs duties, claim rebates, or transfer to other importers.

Claiming RoDTEP Benefits Step-by-Step

• Declare RoDTEP claim in the shipping bill.
• Customs process the claim after filing the Export General Manifest (EGM).
• An account at ICEGATE generates a scroll containing eligible Shipping Bills.
• Establish a credit ledger account for RoDTEP on ICEGATE..
• Log in to the account and generate scrips based on relevant shipping bills.
• Refunds appear in the ledger account, available for duty payments, imports, or transfers.

Comparing MEIS and RoDTEP

MEIS	RoDTEP
Incentives for goods export	Refund of unreimbursed duties and taxes
Non-compliant with WTO norms	Compliant with WTO norms
2%-5% of FOB value	Product-specific percentage not yet notified
Physical transferable scrips	Transferable duty credit or electronic scrips via electronic ledger

Conclusion

RoDTEP has emerged as a significant boon for India’s export industry, replacing earlier subsidy programs and ensuring compliance with WTO regulations. By allowing for the refund of previously unattainable duties and taxes, streamlining processes through digitization, and embracing a diverse sector approach, the scheme has the potential to invigorate India’s exports across the board.