Remission Of Duties Or Taxes On Export Products (RoDETP) Scheme

About The Scheme

• RoDTEP is a new scheme to replace the existing MEIS scheme for exports of goods from India, which aims to reimburse the taxes and duties incurred by exporters such as local taxes, coal cess, mandi tax, electricity duties and the fuel used for transportation, which are not getting exempted or refunded under any other existing scheme. The rebate would be claimed as a percentage of the Freight On Board (FOB) value of exports.
• The Indian government has recently approved this scheme and will be notified in a phased manner and accordingly Items will be shifted from existing scheme MEIS to RoDTEP with proper monitoring &audit mechanism.
• This scheme will incentivize exporters at an estimated cost of Rs. 50,000 crore to the exchequer.

Objectives of RoDTEP scheme?

• To boost exports Scheme for enhancing Exports to International Markets
• To make Indian exports cost-competitive and create a level playing field for Indian exporters in the International market
• To give a boost to employment generation in various sectors
• It aims to boost dwindling outward shipments

Features of RoDTEP

• Presently only 30% of total actual indirect taxes incurred by the exporters are refunded through existing MEIS scheme
• Under the WTO rules, certain duties like state taxes on power, oil, water, and education cess are allowed to be refunded
• In this backdrop, RoDTEP scheme framed in accordance with WTO guidelines which reimburses the taxes/ duties/ levies, at the central, state and local level, which is currently not being refunded under any other mechanism, but which are incurred in the process of manufacture and distribution of exported products and the following taxes will be refunded through this scheme
• Taxes include VAT, Central excise duties on fuel used for transportation, electrical duties, which are not getting exempted or refunded under any other existing mechanism.
• Earlier incentives are provided in the form of transferable Scrips, but this new scheme aims at creating an Electronic credit ledger in the customs system which enables digital refunds to exporters, duties, and taxes levied at the center, state and local levels.

Key differences between MEIS and RoDTEP?

Aspect	MEIS	RoDTEP
Schema of Incentive	Additional Incentive on Exports of goods apart from other refunds and drawbacks available on undertaking the said exports.	Refund of Indirect taxes on Inputs used in the manufacture of exported product which is not being currently reimbursed by any other existing schemes.
WTO Compliance	Non-Compliant with WTO trade norms	Compliant with WTO trade norms
Incentive Percentage	2% to 5% of FOB value of Exports.	Product based % way of reward – Expected to be lesser than the existing MEIS Incentive scheme [To be notified later]
Mode of Issuance	Issuance in the form of transferable scrips (Hardcopy/ downloadable)	Issuance in the form of transferable duty credit/ electronic scrip which will be maintained in electronic ledger.
Transferability	Freely Transferable	Freely Transferable