RoDTEP, which stands for Remission of Duties and Taxes on Exported Products Scheme, was launched in January 2021, as a successor to the earlier Merchandise Export from India Scheme (MEIS).

Its primary objective is to provide exporters with a comprehensive refund of various embedded duties and taxes that were not being offset through existing export incentive schemes. This includes the reimbursement of duties and taxes at the central, state, and local levels, ultimately lowering the cost of exported goods.

This includes not just the expenses directly paid by the exporter but also the accumulated indirect taxes from earlier stages on the goods.

Tax intended to be compensated to the exporters in the scheme are:

1. Value Added Tax (VAT) and Excise duty on the fuel used for the transportation expenses borne by the exporter.
2. Electricity duty on the purchase of electricity.
3. Mandi Tax/ Municipal Tax/ Property Taxes.
4. Stamp duty on export documents etc.

Eligibility for RoDTEP scheme:

All exporters of goods are eligible to benefit under the scheme. Such a person should have directly exported the goods. The benefits of this scheme can be claimed irrespective of the turnover.

It is applicable to all sectors apart from:

1. Apparel and make-up.
2. Steel, pharmaceuticals, organic and inorganic chemicals.

The scheme also covers goods that are exported through e-commerce platforms via courier services.

Note: It is mandatory for the exporters to submit a declaration in the shipping bills, mentioning whether they intend to claim RoDTEP on the export items. This by default, will be assigned to “No”, which means that no claim will be made on this export.

Distribution of benefits of the RoDTEP Scheme

Benefits under RoDTEP scheme are provided in the form of transferable duty credit e-scrip which can be utilized for payment of Basic Customs Duty.

RoDTEP scripts are transferable to any other person having a valid IEC and ICEGATE registration.

Advantages of RoDTEP Scheme

1. Enhanced Global Competitiveness - By reducing the burden of taxes and duties, exporters can offer their products at more competitive prices, attracting global buyers and expanding their market share.
2. WTO Compliant - RoDTEP scheme is compliant with the trade norms set up by the WTO.
3. Simplified Procedure – RoDTEP scheme is automated.
4. Diversification of Exports - RODTEP encourages exporters to diversify their product range and explore new markets. By reducing the financial barriers, exporters can now venture into unexplored territories and cater to a wider range of demands.
5. Contributing to economic growth - A thriving export industry directly supports economic expansion. Export growth generates increased foreign exchange revenues, which improves the nation's reserves.

Conclusion

The RoDTEP Scheme aligns with the Indian government's overarching vision of Atmanirbhar Bharat (self-reliant India) and 'Make in India'. By reducing the financial burden on exporters, the scheme not only enhances their competitiveness but also plays a pivotal role in India's economic growth story.