RoDTEP Scheme: Benefits, Features, Details

[Adam Jones]

The RoDTEP scheme or remission of duties and taxes on exported products is a scheme launched by the Indian government to facilitate exports efficiently.  It replaced the MEIS scheme on January 1st, 2021. 

 

The main objective of this scheme is to reimburse exporters for taxes and duties that were previously non -reimbursable.  This gives exporters an incentive to export goods and services outside the country and also promotes international trade.   

 

FEATURES AND BENEFITS  

• A fully automated credit system wherein reimbursements are made electronically and are transferable. These credits are kept and tracked by a computerized ledger.     

 

• Duties and taxes which were non-refundable before will be refunded.  Through this scheme, mandi, VAT, coal cess, and central excise tax on fuel are reimbursed.  All goods under the MEIS are covered in the RODtep  scheme  

  

• For consistency, this is a multi-sectoral program that covers all industries including textiles.   A  committee will be established to decide how to implement the program across different industries, how much each industry will benefit, and other issues. 

 

• Digitization makes it easier to verify documents. In addition, the exporter's records will be checked by risk management software for quick and accurate transaction processing. 

 

• The main aim of RoDTEP is to ensure a level playing field for Indian exporters so that they can compete with international exporters. 

  

• Nearly 68,000 crores have been provisioned for export credit under this scheme and 50,000 crores on projected foregone revenue.   

 

• The rebate or benefits will be calculated as a percentage of the FOB value of exported goods. 

 

• RoDTEP will increase insurance coverage for exporters.  The ministry of finance has introduced a   guarantee through the credit guarantee corporation which has a budget of Rs.1700 crores 

 

• The automated module for tax refunds provides transparency to the scheme by providing real-time data on the validity and compliance on WTO norms 

 

BENEFITS  

IT FREES UP WORKING CAPITAL: With refunds on inout tax credits, exporters can avoid double taxation and use the credits to pay the import duties for raw materials and thus save on working capital 

FASTER CLAIMS AND REFUNDS: Since the entire process will be automated, refund claims will be processed much more quickly thus saving time on making credits available to the exporters. 

ADDITIONAL EXPORT CREDIT:  As this scheme provides additional export credit, exports can plan for increased volumes 

EASIER TRANSFERABILITY OF REBATE:  The rebate would be credited directly to the RoDTEP ledger of the organization which can then be transferred electronically to any importer.  This does away with the hassle of registering licenses which will allow exporters to realize benefits much more easily. 

THE SUBSIDY IS WTO COMPLIANT: There will be no uncertainty about the benefits granted under this scheme. 

REDUCED CLEARANCE TIME: Customs clearance on export goods  at seaports and airports will be made quicker and will thus reduce the waiting time 

AFFORDABLE TESTING AND CERTIFICATION SERVICES: Under this scheme, exporters will get testing and certification services within India itself and no longer need to rely on international organizations for this.  For this purpose, facilities are being developed under the public-private partnership model and will provide internationally accepted tests and certifications.