The Union Government had extended the benefits of the RoDTEP scheme to all export goods which is expected to boost exports from the country.
- From January 1, 2021, the government will extend the benefits of the Remission of Duties and Taxes on Exported Products (RoDTEP) to all export goods.
- The Ministry of Finance stated that the rates under this scheme are applicable from this date to all eligible export goods irrespective of the date of notification.
- The government’s decision to extend the benefits would boost exports.
- Initially, the scheme was extended to only three sectors with limited resources.
- The Department of Commerce will notify the rates of the scheme based on the recommendation of a committee constituted for the purpose.
- An exporter can use the benefits of the RoDTEP scheme is required to declare his intention for each export item in the shipping bill or bill of exports.
- The RoDTEP will be allowed to specified conditions, exclusions, ineligibilities, non-fulfillment of requirements, and restrictions as will be notified by the MInistry of Finance.
- This scheme replaced the Merchandise Export from India Scheme (MEIS) last year.
- This is because MEIS was not up to the rules of the World Trade Organisation.
- When the US complained, a dispute settlement panel ruled against India’s use of MEIS.
- It showed that the duty credit scrips awarded under the scheme to be inconsistent with the WTO norms.
- Under the RoDTEP scheme, a refund will be made on the exporters at the central, state, and local duties or taxes that were not being rebated or refunded.
- The exporter will get the refund credited to the ledger account that is with the customs department.
- The exporter can use the credited refund to pay Basic Customs duty on imported goods.
- The credits under this scheme can also be transferred to other importers.
- Due to the resource crunch, the notification of rates may delay.
The move to extend RoDTEP Scheme to all export goods comes at a time the country is recovering from one of the worst economic downturns in the recent past. It will give immense confidence to businesses to start producing export-oriented goods. But, it remains to be seen whether we can see a spike in exports as a majority of the nations are still reeling under the COVID-19 pandemic and their economies are yet to take flight.