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The Remission of Duties or Taxes on Export Products (RoDTEP) Scheme has been formed by the Indian government. It is a scheme that replaces the existing MEIS (Merchandise Exports from India Scheme) scheme for the export of goods from India.
It aims to reimburse the taxes and duties incurred by the exporters like the local taxes, coal cess, electricity duties, mandi tax, and the fuel used for transportation that is not exempted nor refunded under any other existing scheme. The rebate shall be claimed as a percentage of the FOB (Freight on Board) value of exports.
The government of India has approved this scheme recently, and it shall be notified in a phased manner, and accordingly, items shall be moved from the existing scheme of MEIS to RoDTEP with appropriate monitoring and audit mechanism. This scheme shall incentivize exporters at a cost of INR 50000 crore to the exchequer.
The main objectives of this scheme are as follows:
Some of the notable points of this scheme are as follows:
The benefits that are provided under the RoDTEP scheme to the Indian exporters are as follows:
By adopting this scheme, the Indian exporters would be able to meet the international standards for exports. It shall help in increasing the economy of the country and working capital for the enterprise.
The Ministry of Finance shall establish a working group on standards that will lay down the roadmap for the adoption of standards, enforcement, and timelines. It will also provide support to the exporters in dealing with the non-Tariff barriers such as slow testing and export clearance process.
Exporters would be able to avail affordable testing and certification to get affordable certifications within the country rather than relying on international organizations. The services of testing and certification are developed in Public, private Partnership mode to help Indian exporters to have access to internationally recognized tests.
Tax assessment may get fully automatic for the exporters. Businesses shall access their refunds for GST through an automatic refund route.
The Ministry of Finance has been working on minimizing the clearance time at the airports and ports in order to decrease delays in exports. Exporters shall be able to monitor real-time clearance status through a digital medium.
Exporters are set to enjoy lower rates of interest on capital loans and other financial benefits like higher insurance cover and financial incentives on exports.
The scheme of MEIS and RoDTEP differ in the following aspects:
In case of MEIS, an additional incentive in exports of goods is available apart from other refunds and drawbacks on undertaking such export, whereas in case of RoDTEP refund of indirect taxes on the inputs used in the manufacture of exported products which is not presently reimbursed by any other existing schemes.
MEIS is non-compliant with WTO trade norms, whereas RoDTEP is compliant with WTO trade norms.
2% to 5% of FOB value of exports in case of MEIS whereas Product based % way of reward in RoDTEP.
In case of MEIS, issuance is in the form of transferable scrips such as hardcopy, etc. whereas in case of RoDTEP issuance is in the form of transferable duty credit or electronic scrip which shall be maintained in the electronic ledger.
As far as transferability is concerned, both MEIS, as well as RoDTEP, is freely transferable.
Our Recommendation: FEMA Compliance on Export of Goods and Services