Mazars Tax Alert | Edition 03.21

Modalities of Remission of Duties and Taxes on Exported Products (RoDTEP)

Govt. vide Notification No. 19/2015-2020 dated August 17, 2021, notified manner and rates of RoDTEP Scheme in Foreign Trade Policy (‘FTP’).

The notified scheme incorporates amended Foreign Trade Policy (“FTP”) for introducing RoDTEP scheme in replacement of MEIS in the following manner:

1. This scheme has been made effective from January 1, 2021;
2. Various taxes levied on procurement, at central and state level would be refunded under this scheme;
3. Determination of Ceiling rates will be done by Committee in Department of Revenue;
4. The rebate would be granted to eligible exporters at a notified rate given as a percentage of the Freight on Board (‘FOB’) value of exports with a value cap per unit of exported product.
5. The benefit of rebate shall be allowed only if export proceeds are realized. If export proceeds are not realized within time allowed under the Foreign Exchange Management Act, 1999, benefit will not be granted or if granted, will be withdrawn;
6. Rebate will be in the form of transferable duty credit/electronic scrip, which will be maintained in an electronic ledger by the CBIC. The e-scrips can be used for payment of Basic Customs Duty (‘BCD’).
7. The Government has finally notified rates for granting rebate and these notified rates only range from 0.3% to 4.3% as compared to benefit of 2% to 7% available in past under MEIS. Needless to mention that such low rates have caused massive commotion among Industry experts and exporters.
8. RoDTEP Scheme would not be available for duties, taxes and levies already exempted, remitted, or credited under other Schemes.
9. FTP also provides that exports by EOU, FTZ / EPZ / SEZ unit and by AA / DFIA / SIA holders may be subsequently included in RoDTEP Scheme and rates thereof will be decided by RoDTEP Committee.
10. There are certain ineligible categories such as exports subject to Minimum Export Price (‘MEP’) or Export Duty, Deemed Exports and Supply by DTA to SEZ/FTWZ, exports from Non-EDI Ports