Remission of Duties and Taxes on Exported Products Scheme

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Context:

The government is setting up a system to verify that only taxes paid on materials used (input duties) are refunded under the RoDTEP scheme.

Relevance:

GS-III: Indian Economy (Growth and Development of Indian Economy, Taxation)

Dimensions of the Article:

The RoDTEP Scheme allows exporters to receive refunds on taxes and duties that are not exempted or refunded under any other scheme.
Under the scheme, exporters receive refunds on the embedded taxes and duties previously non-recoverable.
The chief aim of the scheme is to boost the export of goods that were poor in volume.
The scheme basically replaces the Merchandise Export from India Scheme (MEIS).
The scheme provides for rebates of Central, State and Local duties/taxes/ levies which are not refunded under any other duty remission schemes.
The RoDTEP scheme can be said to be a combination of the MEIS and the Rebate of State and Central Taxes and Levies (RoSCTL).
Under this scheme, refund would be claimed as a percentage of the Freight On Board (FOB) value of exports.

It covers duties and taxes levied at the central, state and local levels that are not reimbursed under any other mechanism. Items that were under the MEIS and the RoSCTL are shifted to the RoDTEP.
Refunds will be issued to exporters as transferable duty credit/electronic scrips and maintained in an electronic ledger. This is keeping in line with the Digital India mission. This can be used to pay basic customs duty on imported goods. The credits can also be transferred to other importers.
Faster clearance through a digital platform will be facilitated through a monitoring & audit mechanism, with an IT-based risk management system that would physically verify the exporters’ records.
The scheme is applicable across all sectors.

Being WTO-compliant, the RoDTEP scheme can make available from the government benefits to the exporters seamlessly.
The scheme is more exhaustive in that certain taxes that were not covered under the previous scheme are also included in the list, for example, education cess, state taxes on oil, power and water.
It will add more competitiveness in the foreign markets, with assured duty benefits by the Indian Government.
It will also help exporters meet international standards and promote business growth.
Also under RoDTEP, tax assessment is set to become fully automatic for exporters, hence, Businesses will get access to their refunds for GST via an automatic refund-route.