RoDTEP Scheme: Rates, Guidelines, Eligibility, Features, Benefits

RoDTEP stands for Remission of Duties and Taxes on Export Products. It is a new scheme applicable from 1 January 2021. It replaced the existing MEIS (Merchandise Exports from India Scheme). The scheme ensures that the exporters receive the refunds on the embedded taxes and duties previously non-recoverable. It was introduced with the intention to boost exports which were relatively poor in volume previously.

Need for the RoDTEP Scheme

The US had challenged India’s key export subsidy schemes in the WTO (World Trade Organisation), claiming them to harm the American workers. A dispute panel in the WTO ruled against India, stating that the export subsidy programmes that were provided by the Government of India violated the provisions of the trade body’s norms. The panel further recommended that the export subsidy programmes be withdrawn. This led to the birth of the RoDTEP Scheme, so as to ensure that India stays WTO-compliant.

The following were some of the export subsidy programmes recommended to be withdrawn:-

• Merchandise Exports from India Scheme
• Export Oriented Units Scheme
• Electronics Hardware Technology Parks Scheme
• Bio-Technology Parks Scheme
• Export Promotion Capital Goods Scheme
• Special Economic Zones (SEZ) Scheme
• Duty-Free Imports for Exporters Scheme

Features of the RoDTEP Scheme

Refund of the previously non-refundable duties and taxes

Mandi tax, VAT, Coal cess, Central Excise duty on fuel etc. will now be refunded under this particular scheme. All the items under the MEIS and the RoSTCL (Rebate of State and Central Taxes and Levies) are now under the purview of the RoDTEP Scheme.

Automated system of credit

The refund will be issued in the form of transferable electronic scrips. These duty credits will be maintained and tracked through an electronic ledger.

Quick verification through digitisation

Through the introduction of the digital platform, the clearance happens at a much faster rate. Verification of the records of the exporters will be done with the help of an IT-based risk management system to ensure speed and accuracy of transaction processing.

Multi-sector scheme

Under RoDTEP, all sectors, including the textiles sector, are covered, so as to ensure uniformity across all areas. Additionally, a dedicated committee will be set up to decide regarding the sequence of introduction of the scheme across the various sectors, what degree of benefit is to be extended to each sector, and such related matters.

Eligibility to obtain benefits of the RoDTEP Scheme

• All sectors, including the textiles sector, may enjoy the benefits of the RoDTEP Scheme. Labor-intensive sectors that enjoy benefits under the MEIS Scheme will be given a priority.
• Manufacturer exporters and merchant exporters (traders) are both eligible for the benefits of this scheme.
• There is no particular turnover threshold to claim the RoDTEP.
• Re-exported products are not eligible under this scheme.
• To be eligible to avail the benefits of this scheme, the exported products need to have the country of origin as India.
• Special Economic Zone Units and Export Oriented Units are also eligible to claim the benefits under this scheme.
• Where goods have been exported via courier through e-commerce platforms, RoDTEP scheme applies to them as well.

Availing benefits under RoDTEP Scheme

The ICEGATE portal (Indian Customs Electronic Gateway) will contain the details regarding the credits availed by the exporter. At the port, the exporter must indicate in the shipping bill the details regarding the claim of the RoDTEP benefit with regard to a particular item of export and generate a credit scrip for it. These credit scrips are then used to pay basic customs duties, claim rebates or can be transferred to other importers, as the case may be.

The process for the generation and claiming of scrips under the RoDTEP scheme are as follows-

• The exporter should make a declaration of the claim for RoDTEP in the shipping bill.
• Once the Export General Manifest (EGM) is filed, the claim will be processed by the Customs.
• After processing the claim, a scroll with all individual Shipping Bills for the admissible amount will be generated and available in the users account at ICEGATE portal.
• The exporter should log in to the ICEGATE portal and create a RoDTEP credit ledger account.
• After the RoDTEP credit ledger account is created, the exporters can log in to their accounts and generate scrips by selecting the relevant shipping bills.
• Once, the scrips are generated, the refund will be credited and reflected in the exporter’s ledger account and will be available for utilisation in payment of the eligible duties and during imports or for transfer to any other importers.

Currently, the rate of duty of remission for the products under RoDTEP scheme is not yet notified by the Government of India.

MEIS vs RoDTEP

Frequently Asked Questions

Has the RoDTEP scheme rates been notified?

On 17 August 2021, the Central Government notified the RoDTEP scheme rates and guidelines. The notified rates under the RoDTEP scheme for several sectors include the rates at 0.5%, 1.4%, 2.4% and 4%. However, the government is yet to notify a fixed quantum of rebate per unit for certain export items.

What industries are covered under the RoDTEP Scheme?

The RoDTEP scheme covers employment-oriented sectors like marine, leather, gems and jewellery, agriculture, etc. It will also support other sectors like electrical/electronics, automobiles, machinery, plastics, etc. The RoDTEP and RoSCTL (Rebate of State and Central Taxes and Levies) cover the entire value chain of textiles.

Which are the sectors that have been excluded from the RoDTEP scheme currently? 

Some of the most critical sectors currently excluded from the benefit under the RoDTEP scheme are pharmaceuticals, steel, organic and inorganic chemicals, etc.

What are the documents required for applying to the RoDTEP Scheme?

The documents required to apply for RoDTEP Scheme:

• Shipping bills
• Electronic Bank Realisation Certificate (eBRC)
• DSC – Class 3
• Registration Cum Membership Certificate (RCMC)

How long will the  RoDTEP scheme be in effect?

The RoDTEP scheme came into effect on 1 January 2021. The RoDTEP scheme will be in effect till 2025 or until a new scheme comes in to replace it. The RoDTEP scheme subsidises the entire merchandise exports of India.

Disclaimer: The materials provided herein are solely for information purposes. No attorney-client relationship is created when you access or use the site or the materials. The information presented on this site does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice from an attorney licensed in your state.