Circular No.ES/258/2019-20 16th March, 2020
To: Members of the Council
Sub: Cabinet approves scheme for “Remission of Duties and Taxes on Exported Products (RoDTEP)”
We would like to inform you that the Cabinet Committee on Economic Affairs (CCEA) has issued a Press Release on 13th March, 2020 regarding approval of the scheme for “Remission of Duties and Taxes on Exported Products (RoDTEP)” to enhance exports to international markets and boost employment generation in various sectors.
The RoDTEP Scheme
A mechanism for reimbursement of taxes/ duties/ levies, at the central, state and local level, which are currently not being refunded under any other mechanism, but which are incurred in the process of manufacture and distribution of exported products.
Give a boost to the domestic industry and Indian exports providing a level playing field for Indian producers in the International market so that domestic taxes/duties are not exported.
An inter-ministerial Committee will determine the rates and items for which the reimbursement of taxes and duties would be provided.
Refund in the form of transferable duty credit/electronic scrip will be issued to the exporters, which will be maintained in an electronic ledger.
The refunds under this scheme would be a step towards “zero-rating” of exports, along with refunds such as Drawback and IGST and this will lead to cost competitiveness of exported products in international markets and better employment opportunities in export oriented manufacturing industries.
Salient features of RoDTEP Scheme are a s follows–
At present, GST taxes and import/customs duties for inputs required to manufacture exported products are either exempted or refunded. However, certain Taxes/duties/levies that are outside GST and are not refunded for exports, such as, VAT on fuel used in transportation, Mandi tax, Duty on electricity used during manufacturing etc. would be covered for reimbursement under the RoDTEP Scheme.
The sequence of introduction of the Scheme across sectors, prioritization of the sectors to be covered, degree of benefit to be given on various items within the rates set by the Committee will be decided and notified by the Department of Commerce (DoC).
The rebate would be claimed as a percentage of the Freight On Board (FOB) value of exports.
A monitoring and audit mechanism, with an Information Technology based Risk Management System (RMS) would physically verify the records of the exporters.
As and when the rates under the RoDTEP Scheme are announced for a tariff line/ item, the Merchandise Exports from India Scheme (MEIS) benefits on such tariff line/item will be discontinued.
Members may kindly make a note of the above details of the RoDTEP Scheme.