RoDTEP, also known as Remission of Duties and Taxes on Export Products, is an export promotion scheme run by the Indian government. This scheme came into effect on January 1 2021, and targets to balance taxes and duties acquired on exported products. It assists in decreasing the input cost of exported items, thus ensuring goods manufactured in India are competitive.
The RoDTEP scheme provides refunds on all state, central, and local duties, taxes, and levies on exported products. This includes both direct and indirect charges put up by the exporters and accruing indirect taxes at prior phases of production. The main aim is to repay the duties, taxes, and levies on products and services utilized in the production and allocation of exported products.
Goals of the RoDTEP Scheme
The goals of the scheme are given below:
- Counteract taxes and duties on exported products.
- Give respite to exporters by paying back the charges of taxes and duties.
- Decrease the burden of input charges on exporters, thus making India-made goods and services more competitive globally.
- Endorse and encourage export activities in India by decreasing export costs.
- Ease financial growth by lessening the tax load on exporters.
Significant Features of the RoDTEP Scheme
The most significant features of the scheme are as follows:
Rebate of Fixed Duties and Taxes
The RoDTEP strongly promotes the export of products and services. Earlier, exporters included duties and taxes as input charges and passed them on to their global buyers. By RoDTEP, exporters can ask for refunds and decrease their selling costs. Some of the general taxes and duties for which rebates can be obtained are:
- Taxes on electricity purchases.
- Excise duty and VAT on fuel utilized on transportation charges for power plants and diesel generator sets.
- Stamp duty on export papers.
- Property tax, municipal tax, and mandi tax.
Compliance with WTO
RoDTEP is a scheme compliant with WTO (World Trade Organization) norms and is made to help exporters meet global standards. The scheme allows exporters to improve their products’ cost competitiveness globally. Offering guaranteed duty benefits it helps exporters offset taxes and make their goods more appealing to global buyers.
Multi-Sector Planning
The scheme ensure consistency across all segments. Moreover, certain segments, such as steel, pharmaceuticals, organic and inorganic chemicals, are currently exempted from the benefits offered.
Digitalisation and Clarity
The RoDTEP highlights digitalisation and clarity in the application and processing of refunds. It aims to facilitate the processes by using technology and assuring fast disbursal of advantages to exporters.
Integral to Different Schemes
The scheme is interdependent with current export promotion schemes like MEIS or Merchandise Exports from India Scheme. It gives an extra benefit by including taxes and duties not labeled by different schemes.
These features generally make the RoDTEP a complete mechanism for adjusting exporters for the taxes and duties brought upon exported goods, supporting export activities in India.
Eligibility Criteria for the RoDTEP Scheme
Here are the main eligibility criteria for the scheme:
- Most segments, including textiles, can enjoy the benefits given, with the exclusion of certain companies like pharmaceuticals, steel, and organic and inorganic chemicals.
- The scheme will give preference to labour-demanding sectors that already benefit from the MEIS.
- Both manufacturer and merchant exporters are entitled to the scheme.
- There is no particular turnover threshold needed to claim the RoDTEP scheme advantages.
- Re-exported goods are not eligible for advantages under the scheme; only goods of Indian origin are qualified.
- SEZ or Special economic zone units and export-oriented units (EOUs) are qualified for the benefits.
- The scheme is also applicable to products exported through couriers via e-commerce platforms.
Exporters are required to meet these eligibility criteria and conform to the instructions given by the government and the appropriate authorities to avail of this scheme.
Sectors Not Eligible for RoDTEP
The given below categories of exports or exporters are not qualified for refund under this export marketing scheme:
- Export of imported products intended for re-export.
- Trans-shipment exports, where the products are manufactured in a 3rd country but passed over to India.
- Export goods that are accountable to a minimum export cost or duty.
- Supplies of products from DTA or domestic tariff area units to free trade warehousing zone (FTWZ) and SEZ units.
- Products made in EHTPs or electronic hardware technology parks and BTP or biotechnology parks.
- Products made or exported by units authorized as 100% EOUs.
- Products that have been put to use after making.
The prominence of the RoDTEP Scheme in India
The government set up this scheme to address different requirements and challenges faced by exporters. The key requirements for putting this scheme into action are as follows:
Increase Export Competitiveness: The scheme aims to increase the competitiveness of Indian exports in the international market. Decreasing the fixed taxes and duties on exported products assists exporters in providing their products at more competitive rates.
Counteract Unrefunded Taxes: Earlier, different taxes and duties were applied to export products, which directed the growth in costs for exporters. The RoDTEP scheme counteracts these unrefunded levies and taxes, thus assuring a level playing area for exporters of India.
Address Secret Taxes and Duties: The former fixed taxes and duties on exported products came from different state, central, and local bodies, which led to an increase in costs. This scheme aims at these concealed taxes and targets to give relief to exporters by rebating them.
Help with Cash Flow for Exporters: Previously, exporters faced challenges in the sense of obstructed working capital because of the non-availability of timely rebates on taxes and duties. The RoDTEP scheme assists in addressing this problem by giving assured duty advantages and increasing cash flow for exporters.
Endorse Export-led Development: The government’s aim is to endorse export-led development as an operator of the economy. By lessening the load of taxes and duties, the RoDTEP scheme impels exporters and supports them in increasing their export activities, adding to financial growth and employment.
Final Words
The RoDTEP scheme has come out as an essential policy initiative in India, targeting to increase export competitiveness and offer much-required comfort to exporters. Its comprehensive nature, covering various industries, shows the government’s promise to help numerous exporters. Furthermore, it is important for exporters to know the eligibility criteria and follow the scheme’s rules to benefit from it completely.
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