With an objective to boost exports, the government on Tuesday notified the rates and guidelines for export incentive scheme Remission of Duties and Taxes on Exported Products (RoDTEP).
The rates under RoDTEP scheme for different sectors include 0.5 per cent, 2.5 per cent and 4 per cent and is applicable on 8555 tariff line items. The rates were much awaited, and this will help in easing the liquidity worries for exporter as the scheme will take effect from January 1, 2021.
Vide Notification No 19/2015-2020 dated 17th August 2021, Ministry of Commerce and Industry has inserted Sr. no 4.54, which provides for guidelines of RoDTEP scheme in Chapter 4 of Foreign Trade Policy 2015-2020. The key highlights of the same are as below;
Scheme Objectives and Operating Principles
- Objective of scheme is to refund, currently unrefunded duties/taxes/levies at the Central/State/Local levels on the exported products.
- Rebate under the Scheme shall not be available in respect of duties and taxes already exempted or remitted or credited.
- Scheme will operate in Budgetary framework for each financial year and the budget shall be finalised by Ministry of Finance in consultation with Department of Commerce.
- Under the scheme, rebate would be granted to eligible exporters at a notified rate as a percentage of FOB value with a cap per unit of the exported product on export of items which are categorized under the notified 8 digit HS code.
- Efforts to be made to review rates on annual basis and notify before beginning of financial year.
- The rates of rebate/ value cap per unit have been notified in Appendix 4R.
- The rebate to be allowed is subject to the receipt of sale proceeds within the time allowed under FEMA Act, 1999 failing which the rebate shall be deemed never to have been allowed. It is important to note that would not be dependent on realisation of export proceeds at the time of issuance of rebate.
- Scheme would be implemented through end-to-end digitization of issuance of rebate amount in the form of transferable duty credit/ e-scrip, which will be maintained in an electronic credit ledger by the CBIC.
- Necessary rules and procedure regarding grant of scheme, frauds/misuse of scheme, penalty shall be built by CBIC.
- E-scrip to be used only for the purpose of payment of BCD.
Ineligible Supplies/Items/Categories under the Scheme
Few of the categories where exporter shall not be eligible for scheme is mentioned below;
- Export of imported goods covered under Paragraph 2.46 of FTP i.e. Import for Export
- Export through transhipment
- Export product subject to minimum export price or export duty
- Products restricted and prohibited under Schedule 2 of Export policy in ITC (HS)
- Deemed Exports
- Supply by DTA to SEZ/FTWZ
- Products manufactured party or wholly in warehouse under Section 65, Customs Act
- Products exported in discharge of export obligation against Advance Authorization/Duty Free Import Authorization/Special Advance Authorization*
- Products exported by unit in 100% EOU/Free Trade Zone/Export Processing Zones/SEZ*.
* Inclusion to scheme to be made basis the recommendation of RoDTEP Committee.
Monitoring, Audit and Risk Management System
For the purposes of audit and verification the exporter has to maintain records substantiating the claims under the scheme. Also, a monitoring and audit mechanism would be put in place by CBIC.