The government on Tuesday extended the period of its flagship export promotion scheme Remission of Duties and Taxes on Exported Products (RoDTEP) till the end of this year as exporters face increasing uncertainty in the global market.
The exports from the units in the Domestic Tariff Area (DTA), Export Oriented Units (EoU), Advance Authorisations (AA) holders and units in Special Economic Zones (SEZs) will be eligible for the scheme, a notification by the Directorate General of Foreign Trade (DGFT) said.
What does this advance authorization do?
Advance Authorization allows exporters duty free import of inputs for production of export goods.
“The existing RoDTEP rates will continue to apply for all export items. The operation of the scheme shall, however, remain subject to budgetary framework so that remissions during the financial year are managed within approved allocation,” the notification said.
The allocation for the scheme this year has been pegged at Rs 20,381 crore, up from last year’s Rs 19091 crore. The rates of refund of taxes range from 0.3% to 3.9%.
“The timely extension of RoDTEP has removed the uncertainty that was weighing on the exporting community. This step comes at a critical juncture when exporters are navigating global headwinds, and it provides the much-needed policy continuity to plan exports with greater confidence,” president of Federation of Indian Export Organisations S C Ralhan said.
How did the scheme came about?
The scheme, which was first introduced in 2021, covers exports of 10,642 products. It has seen many extensions and modifications since it was first introduced. The current period of extension was expiring on Tuesday.
The incentive is paid in the form of transferable duty credit scrip which can be used to pay import duties or sold in the market by exporters.
The RoDTEP scheme is designed to refund duties, taxes and levies at the central, state and local level that get added to the cost of products meant for exports. It is a replacement for the Merchandise Exports from India scheme which along with other export promotion schemes were successfully challenged at the World Trade Organization (WTO) by the US.