Govt extends RoDTEP scheme for exporters till June 2024

In a bid to boost exports, the government has extended the scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) support from September 30, 2023, till June 30, 2024, according to a statement by the commerce ministry. The scheme was implemented in January 2021, as a remission scheme on exports.

"This will help our exporting community to negotiate export contracts in the present international environment on better terms. The Scheme is WTO (World Trade Organization) compatible and is being implemented in an end-to-end IT environment," says the ministry.

According to the ministry, the scheme provides a mechanism for reimbursement of taxes, duties and levies, which are currently not being refunded under any other mechanism, at the central, state and local level, but which are incurred by the export entities in the process of manufacture and distribution of exported products.

Under the Scheme, support of ₹27,018 crore has been extended for the 27-month period till March 31, 2023. The RoDTEP scheme operates under a budgetary framework and for FY23-24, a budget of ₹15,070 crore is available to support 10610 HS lines at the 8-digit level.

What is the RoDTEP scheme?

The objective of the scheme is to refund, currently un-refunded, says the ministry. Under the scheme, duties/taxes/levies, at the central, state and local level, borne on the exported product, including prior stage cumulative indirect taxes on goods and services used in the production of the exported product are refunded. Apart from this, indirect duties/taxes/levies with respect to the distribution of exported products are also refunded.

The government, however, says that the scheme shall not be available in respect of duties and taxes already exempted, remitted or credited.

"RoDTEP support will be available to eligible exporters at a notified rate as a percentage of Freight On Board (FOB) value. Rebate on certain export products will also be subject to a value cap per unit of the exported product. The scheme is to be implemented by Customs through a simplified IT System. Rebate will be issued in the form of a transferable duty credit/ electronic scrip (e-scrip) which will be maintained in an electronic ledger by the Central Board of Indirect Taxes & Customs (CBIC)," says the ministry.

Sectors covered under RoDTEP scheme

According to the ministry, employment-oriented sectors such as marine, agriculture, leather, gems and jewellery and textiles, amongst others have been covered under the Scheme. Other sectors such as automobile, plastics, electrical/electronics, and machinery, amongst others, will also get support through the scheme.

In December last year, the ministry expanded the scope of the RoDTEP scheme by including the exports made from the chemical sector, pharmaceuticals sector and exports of articles of iron and steel.

Notably, the RoDTEP Committee which has been again constituted in the Department of Revenue to review and recommend the ceiling rates under the RoDTEP Scheme for different export sectors, held its first meeting on Tuesday.