Topic Insight
The Scheme RODTEP is the replacement of Merchandise Exports from India Scheme (MEIS). With the introduction of RoDTEP Scheme, the exporters will be compensated for the non-creditable duty/tax costs (such as Electricity Tax, Stamp duty, Mandi Fee, Tax on fuel, etc.) that are embedded in the export goods.
Implementing Authority: Indian Customs
Rebate 0.5% to 4% on FOB Value
Applicability
1. Labor-intensive sectors that enjoy benefits under the MEIS Scheme will be given a priority.
2. Special Economic Zone Units and Export Oriented Units are also eligible to claim the benefits under this scheme.
3. Manufacturer exporters and merchant exporters (traders) are both eligible for the benefits of this scheme.
4. There is no turnover threshold to claim the RODTEP.
5. All sectors, including the textiles sector, may enjoy the benefits of the RODTEP Scheme.
6. Where goods have been exported via courier through e-commerce platforms, RODTEP scheme applies to them as well.
Other Conditions
1. Re-exported products are not eligible under this scheme.
2. To be eligible to avail the benefits of this scheme, the exported products need to have the country of origin as India.
How this scheme works
Stepwise procedure is mentioned below for claiming RODTEP
Step 1: Creating the RODTEP Credit Ledger
The first step is to create electronic credit ledger in ICEGATE portal.
Step 2: Declaration in the Shipping Bills
Eligible Exporters must declare their option of claiming RODTEP benefit against the Shipping Bills after creation of Credit ledger.
Step 3: Claim Processing & Scroll Generation
After Successful scroll generation, the amount is available in the form of credits on the ICEGATE Portal.
Step 4: Generating & Using Scrips
The credits available in the portal can be converted into the scripts and an unique scrip id is created.
FAQ
Which taxes are intended to be compensated to the exporters in RODTEP Scheme?
The scheme intends to compensate the duties/taxes/levies at the Central, State and Local level borne on the exported product including prior stage cumulative indirect taxes on goods and services used in the production and distribution of the exported product. Illustrative taxes would be as follows:
1. VAT and Excise duty on the fuel used in self-incurred transportation costs; on the fuel used in generation of electricity via power plants or DG Sets; on the fuel used in running of machineries/plant;
2. Electricity duty on purchase of electricity;
3. Mandi Tax/ Municipal Taxes/ Property Taxes;
4. Stamp duty on export documents; etc…….
Where one can assess the RODTEP Rates?
The Appendix 4R of Handbook of Procedures, Notified by Department of Commerce under DGFT notification No. 19/2015-20 dated 17.08.2021 may be assessed to check the RODTEP Rates.
Is there any limit to which RODTEP benefit can be claimed?
Value cap per unit of exported product have also been provided under the notified 8-digit HSN code level in Appendix 4R. The rebate would be capped at such value provided on a per unit basis.
Which are the most common sectors which have been excluded from the RODTEP scheme as of now?
Some of the sectors which have been excluded currently from the benefit under the scheme are steel, pharmaceuticals, organic and inorganic chemicals etc.
In which form the benefit under RODTEP scheme will be?
The benefit under RODTEP scheme would be in the form of transferable duty credit scrip, or it may be in the form of electronic scrip which will be maintained in the electronic ledger.
Would RODTEP scrips be transferable to any other person?
Yes, the scrips would be transferable to any other person having a valid IEC and valid ICEGATE Registration.
How will the exporter be able to utilize the RODTEP scrips for getting the benefit of BCD on imports?
The owner of the scrip (either the original exporter beneficiary or any other IEC to whom the scrip was transferred on ICEGATE portal) will be able to use the scrip in the Bills of Entry in the same way as any other duty credit scrips issued by DGFT, by giving the details of the scrips in the license table of the Bill of Entry. The scheme code to be used for these scrips would be “RD” along with the Notification Number as “RODTEP”.
Will the suspension of drawback extend to RODTEP scheme in case of a risky exporter?
Yes, it will be, if the exporter is suspended for the drawback, same will be applicable for the purpose of scrolling out of RODTEP benefits. Thereby, unless the suspension is revoked, the claim cannot be made under RODTEP.
Can there be a remission of arrears from one financial year to the other?
No provision for remission of arrears or contingent liability is permitted under the scheme to be carried over to the next financial year. The RODTEP Scheme would operate in a budgetary framework for each financial year.
Whether realization of foreign currency for the RODTEP benefit is necessary?
The Scheme provides that the rebate under the scheme would not be dependent on the realization of export proceeds at the time of claim of rebate. However, the rebate is allowed subject to receipt of sale proceeds within the timeframe allowed under the Foreign Exchange Management Act, 1999 failing which such rebate shall never be deemed to have been allowed.
