Trade, import and export for MSMEs: RoDTEP (Remission of Duties and Taxes on Exported Products) scheme by the government stems from the fact that the taxes and duties borne on the products exported should be exempted or remitted to exporters. The scheme was notified in August 2021 to boost exports via relief to exporters on taxes and duties and had replaced the Merchandise Exports from India Scheme (MEIS) after India’s export subsidy schemes were challenged by the US in the World Trade Organisation (WTO) which ruled that such schemes violated provisions of the global trade body’s norms.
What’s the RoDTEP scheme?
The scheme enables exporters for rebate of all central, state, and local duties or taxes or levies on the goods exported which weren’t refunded under any other scheme. The scheme also refunds the embedded tax or duties that were not refunded or reimbursed to exporters under MEIS such as VAT on fuel used in transport, mandi tax or duties, duty on electricity used in the production of goods, etc.
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How many items are included under the scheme for exemption?
In order to boost exports, the government in December last year had expanded the scope of the RoDTEP scheme to exports from the chemical and pharma sectors and also exports of certain items of iron and steel. This enhanced the list of export items eligible under the scheme from 8,731 to 10,342 and later to 10,481 with the addition of 18 items related to the textiles sector in March this year. These included saari, shirting fabrics, lungi, etc.
How to determine the quantum of remission available?
Rebate under the scheme is provided to eligible exporters at a rate notified in Appendix 4R, as a percentage of freight on board (FOB) value. According to the Directorate General of Foreign Trade (DGFT), the rates in Appendix 4R effective from February 15, 2023, varies from 0.01 per cent for goods such as natural pearls, unmounted diamonds and other precious stones such as ruby, sapphire, emerald, etc., to 4.3 per cent for goods such as dhoti, saari, shirting fabrics, etc.
What is FOB?
FOB is referred to the total cost incurred in placing the goods on the ship for export. This includes domestic transport costs, storage and warehousing, port handling, brokerage fees, service charges, etc., apart from the production cost and profit.
How to claim remission under the scheme?
It is not credited into the exporter’s bank account like a duty drawback instead RoDTEP is issued in the form of transferrable e-scrips (type of certificates with some monetary value) maintained in an electronic credit ledger by the CBIC (central board of indirect taxes and customs) and can be used for paying basic customs duty on import of goods or may be transferred electronically to another party.
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Who is eligible for the scheme?
According to CBIC, all exporters of goods are eligible to take benefits under this scheme. Such an exporter may either be the merchant or manufacturer exporter. However, such goods should have been directly exported by such person. There is no turnover threshold for exporters to claim the benefits.
How can an exporter avail the scheme?
- Create a RoDTEP credit ledger account on the ICEGATE website under the Services tab. Use the Class 3 individual-type Digital Signature Certificate (DSC) on ICEGate Website to log in
- You have to indicate in your shipping bill that you intend to claim RoDTEP on exported items
- Make required declarations in the SW_INFO_TYPE table of the shipping bill for each item
- Your shipping bills will be routed to the scheme’s Risk Management System (RMS)
- Once the bills are processed for RoDTEP, they will move to ‘scroll’ queues
- Once the scroll is generated, the credits will be available in the ICEGATE account to claim and convert into credit scrips
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