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Overview of RoDTEP Scheme
Because the USA complained about India at the World Trade Organisation (WTO), the RoDTEP Scheme was created. The USA maintained that export subsidies, such as the MEIS programme offered by the GOI, give Indian exporters undue advantages and are prohibited by WTO regulations. As a result, India was unsuccessful in the WTO, and the USA won the decision. It meant that India would now have to discontinue the MEIS programme and develop a new, WTO-compliant programme to support Indian exporters. As a result, the Finance Minister announced the commencement of the Scheme for Remission of Duties and Taxes on Export Products in her Budget Speech on February 1, 2020. Consequently, on March 13th, the Union Cabinet adopted the RoDTEP Scheme.
What does RoDTEP stand for?
The inherent federal, state, and municipal duties and taxes that were not previously refundable under any of the existing programmes may now be repaid to exporters through the RoDTEP Scheme. The programme is anticipated to have a substantial impact on India's ability to compete internationally during the next five to ten years. It is based on the idea that taxes and customs shouldn't be exported, but rather should be waived or paid to exporters. The schemes from earlier carry out RoDTEP Scheme implementation. The plan is predicted to have a big influence on India's Icegate Portal and Customs. Guidelines and benefit rates for the RoDTEP Scheme's 8555 tariff lines were made public by the government on August 17, 2021. The rebate rate ranges from 0.5% to 4% of the total.
Features of RoDTEP Scheme
Only the GST and import customs charges assessed on materials used in the production of export products are now exempted from or reimbursed in some manner. The GST paid can be refunded as input tax credit (ITC), and IGST can also be claimed if the item was exported after paying duty. Raw material import customs duties are either waived under the Advance Authorization system or repaid under the Duty Drawback programme. Yet many of the duties and taxes collected by the federal and state governments are not reimbursed. It raises the overall cost of the finished goods and lowers the competitiveness of Indian goods on the international market.
Refund of Embedded Duties and Taxes
The RoDTEP Scheme aims to refund all those hidden taxes and levies, For example:
- central and state taxes on the fuel (petrol, diesel, compressed natural gas, propane, coal cess, etc.) used to move export goods.
- The tax levied by the government on manufacturing power.
- Mandi tax levied by APMCs.
- Stamp duty on the import-export paperwork, toll tax, etc.
The RoDTEP programme would cover all indirect Central & State taxes that are not repaid in any existing programme, and the Scheme will ensure that the Exporter only exports goods and services, not any form of taxes.
WTO Compliant Scheme
Since the RoDTEP Scheme only refunds concealed taxes and does not offer any further incentives, it complies with WTO regulations. By guaranteeing duty benefits, the RoDTEP Scheme will assist exporters in achieving international standards and making their products cost-competitive on the global market.
Ineligible Supplies / Items / Categories under the RoDTEP scheme
Every financial year, the RoDTEP Scheme would function within a budgetary framework, and an outlay of $12,400 Cr has been announced for the FY 2021–2022.
Find the list of ineligible goods under the RoDTEP Scheme.
- Export of imported commodities is described in FTP 2.46.
- The items that fall under "Schedule-2 of Export Policy in ITC (HS)" are prohibited from export.
- Products that fall under "Schedule-2 of Export Policy in ITC (HS)" are prohibited from export.
- Products manufactured by DTA units are supplied to SEZ/FTWZ units.
- Exporting products that have been used after production.
- The exports for which no ICEGATE EDI electronic documentation has been made.
- the commodities that were exported and claimed to be covered by Customs Notification No. 32/1997, dated April 1, 1997.
- The products are exported from Special Economic Zones (SEZ), Free Trade Zones (FTZ), or Export Processing Zones (EPZ).
- The products made in EHTP and BTP and obtained through EOU.
- Deemed Exports.
- A minimum export price or export tax may apply to the export good.
- Items made in a warehouse in accordance with section 65 of the Customs Act of 1962 (52 of 1962).
- Products exported with a Special Advance Licence, an Advance Licence, or a Tax-Free Import Permit.
Introduction of the RoDTEP Scheme to Exporters of Chemicals, Pharmaceuticals, and Iron and Steel
The RoDTEP programme has now been made available to exporters of chemicals, pharmaceuticals, and iron and steel under chapters 28, 29, 30, and 73 of the ITC HS code.
The Rate of Incentive varies depending on the ITC HS Code and is in the range of 0.5% to 2%.
The majority of the Items are given 0.8% Incentive.
According to the most recent notification, this programme will only be applicable to exports made between 15 December 2022 and 30 September 2023.
We kindly ask all of our clients to complete all required disclosures when submitting shipping bills and to remember to tick the box for RoDTEP while doing so.
Exporters must get a Class 3 digital signature and register on the Icegate website in order to be eligible for RoDTEP incentives.
The process for obtaining benefits under the RoDTEP Scheme
There are the four mandatory steps to avail the benefits under RoDTEP Scheme as follows -
Declaration in the Shipping Bills -
Exporters must state in their Shipping Bill whether or not they intend to claim RoDTEP on the commodities they ship as of January 1, 2021. For RoDTEP, there will be no requirement to declare a unique code or schedule serial number, unlike Drawback.
For each item, the exporter must provide the following declarations in the SW_INFO_TYPE Table in the shipping bill:
| INFO TYPE | DTY | |
|---|---|---|
| INFO QFR | RDT | |
| INFO CODE | RODTEPY - If RoDTEP is availed. RODTEPN - If not availed. |
|
| INFO MSR | Quantity of the items in Statistical UQC as per the Customs Tarrif Act for that item RITC | |
| INFO UQC | UQC for the Quantity indicated in INFO_MSR | |
RoDTEP Declaration has to be mentioned in shipping bills
- Furthermore, a declaration must be included in the Statement Table of the Shipping Bill as shown below for each item where "RODTEPY" is claimed in the INFO CODE.
| STATEMENT TYPE | DEC |
|---|---|
| STATEMENT CODE | RD001 |
ICEGate registration
The exporter must register on ICEGate using an email address, a mobile number, and an import-export code in order to receive a login ID and password.
[Please refer to our detailed step-by-step Guide for Icegate Registration Process - https://afleo.com/icegate-registration/]
Creation of the RoDTEP Credit Ledger
To use the RoDTEP benefits, the exporter must first create a RoDTEP credit ledger account by using Class 3 DSC to access the ICEGate site. The ledger account contains the following details:
- Scroll Details
- Scrip Details
- Transaction Details
- Transfer Scrips
- Approved Scrips Transfer
Generation of scrolls and application process
- A Class 3 Individual type Digital Signature Certificate must be used to submit an application online using the ICEGate website (https://www.icegate.gov.in/).
- The reimbursement under the RoDTEP Scheme is given in the form of an electronic duty credit scrip that may be transferred or used for self-consumption after it has been generated.
- Beginning on January 1st, 2021, the RoDTEP scrolls would be produced on a FIFO (First in first out) basis.
Documents needed to apply for the RoDTEP Scheme
Before applying for benefits under the RoDTEP Scheme, the following documentation must be prepared:
- Class 3 DSC
- Valid Icegate Registration with Login Id and password.
- Shipping bills
- Valid RCMC Copy
Note :- Please be aware that while obtaining an e-brc is not required in order to apply for RoDTEP, we strongly suggest all of our clients to do so first in order to avoid receiving alerts down the road if no e-brc is generated.
A maximum of one year from the shipping bill date or the scroll production date, whichever is later, would be the last date of application for each shipping bill.
Rate of Rebate Under RoDTEP Scheme
- The benefit rates for 8555 export products have been issued by the government in Notification No. 19/2015-2020, dated August 17, 2021.
- Under notice number 19/2015-2020, all qualifying products with the benefit rates listed in Appendix 4R were announced on August 17, 2021.
- Tax reimbursements for exporters will range from 0.5 to 4.3 percent. For each fiscal year, the programme would run within a budgetary framework, and the RoDTEP Scheme has announced an outlay of $12,400 Cr for the upcoming fiscal year (FY) 2021–2022.
How can we help you submit a claim for RoDTEP benefits?
We are a group of highly motivated DGFT experts who have been offering these services for many years. By being current with news, knowing new schemes and all of their policies, realising the advantages for exporters and importers, and simplifying the rules so that they are simple enough for our clients to understand, we want to keep ahead of the curve. Our professionals at Afleo carry out the following duty for you: Advice will be offered regarding the declarations that must be present in shipping bills in order to reap the greatest benefits from the numerous export promotion schemes established by the new foreign trade strategy.
Help with document preparation is available; we recognise the need of correct documentation for efficient processing.
- Registration for ICEGate and setting up a digital signature.
- Account creation for the RoDTEP Credit Ledger.
- Application for the RoDTEP benefits through ICEGate.
- ongoing communication with the Customs Icegate Portal regarding the licence.
- We work quickly to complete the full process.
- We also guide in Sale/Purchase of RoDTEP Scrips and ensure you get the best value for your scrips.
Frequently Asked Questions
The RoDTEP (Remission of Duties or Taxes on Export Products) Scheme was approved by the Government of India on 13th March 2020 by replacing the MEIS Scheme. Under RoDTEP Scheme the exporters can get the refund of all hidden Central, State, and Local duties/taxes/levies on the goods exported which have not been refunded under any other existing scheme. It is WTO compliant Scheme and follows the global principle that the taxes/duties should not be exported; they should be either exempted or remitted to exporters, to make the goods competitive in the global market.
The implementation of the RoDTEP Scheme was announced by Finance Minister Nirmala Sitharaman on February 1st, 2019, and the Government authorised it on March 13th, 2020. The Scheme became operational on January 1, 2021.
The value cap per unit of the exported product has been announced in accordance with appendix 4R, and the amount of any refund or rebate will be limited to that value when granted on a per-unit basis.
| RoDTEP(Remission of Duties or Taxes on Export Products) | MEIS(Merchandise Exports from India Scheme) |
|---|---|
| 1. Plan for reimbursing exporters for taxes and duties they have already paid, such as VAT, Mandi tax, electricity levies, and transportation fuel, among others. | 1. (MEIS) is the supplementary export incentive programme that rewards exporters with 2% to 5% of the FOB value of qualified exports. |
| 2. Compliant with WTO norms | 2. Not in line with WTO standards |
All exporters of goods exporting these items are entitled to benefit from the rebates offered on the 8555 tariff items listed under appendix 4R. Such an exporter could be a manufacturer or a retailer.
No, you cannot simultaneously claim RoDTEP and MEIS. MEIS was entirely replaced by the RoDTEP scheme.
The benefit under RoDTEP would come in the form of electronic scrip that will be kept in the electronic ledger or transferable duty credit scrip that can be transferred.
With the exception of the following sectors, the RoDTEP system will be applied to all of them:
The RoSCTL scheme has been extended for the advantages of clothing and made-ups (Chapters 61, 62, and 63).
Medicines, steel, and both organic and inorganic compounds.
According to Government Notification No. 19/2015-2020, dated August 17, 2021, the benefit rates for 8555 export products are listed in Appendix 4R. Tax reimbursements for exporters will range from 0.5 to 4.3 percent. For each fiscal year, the programme would run within a budgetary framework, and the RoDTEP Scheme has announced an outlay of $12,400 Cr for the upcoming fiscal year (FY) 2021–2022.
According to the Commerce Secretary, the most common industries like steel, pharmaceuticals, organic and inorganic chemicals, etc. are not included in the RoDTEP Scheme because they are already succeeding without any incentives.
The scrips would be transferrable to anyone with a valid IEC and valid ICEGATE Registration, hence the answer is yes.
Benefits from RoDTEP may be used to pay for Basic Customs Duty.
Many industries are excluded from the RoDTEP programme because they are unhappy with the benefit rates that have been announced for them. In these circumstances, exporters may make their concerns known to the DGFT-chaired "RODTEP Policy Committee (RPC)".
The following is the general process for claiming the benefit under the RODTEP scheme:
- The exporter must include a claim for RoDTEP in the shipping bill by filing a statement in order to get the advantages under the RoDTEP scheme.
- Once EGM is filed, a claim can be processed.
- Once completed, an ICEGATE user account scroll with each individual Shipping Bill for the allowable amount would be created.
- A RoDTEP credit ledger account can be created by the IEC holder who used DSC to register on ICEGATE under the Credit Ledger menu.
- The exporter can apply to receive the RoDTEP scrip by logging into his account.
Exporters can take the following actions before the procedure is put into operation because the government has not yet notified them of the full operational framework:
- Class 3 DSC registration for ICEGate.
- Make a ledger account for RODTEP Credit.
Two modules are available for the RoDTEP on ICEGate: 1) establishment of the RoDTEP Ledger Account. 2) The module for managing scrip.
The Scrip Management module offers the following options:
- Scrip Generation
- Viewing Scrip details
- Transaction Details
- Scrip Transfer
- Approve Scrip Transfer Request
Yes, it will be, and the same will be true for the purpose of scrolling out of RoDTEP advantages if the exporter is suspended for the drawback. Therefore, the claim cannot be raised under RoDTEP unless the suspension is lifted.
Under the plan, there is no provision for the forgiveness of arrears or the ability of contingent liabilities to be carried over to the following fiscal year.
Every financial year, the RoDTEP Scheme would function within a budgetary framework, and an outlay of $12,400 Cr has been announced for the FY 2021–2022.
Exporters must state in their Shipping Bill whether or not they intend to claim RoDTEP on the commodities they ship as of January 1, 2021. For RoDTEP, there will be no requirement to declare a unique code or schedule serial number, unlike Drawback.
The SW_INFO_TYPE Table in the Shipping Bill requires the following declarations from the exporter for each item:
| INFO TYPE | DTY | ||
|---|---|---|---|
| INFO QFR | RDT | ||
| INFO CODE | RODTEPY - If RoDTEP is availed. RODTEPN - If not availed. |
||
| INFO MSR | Quantity of the items in Statistical UQC as per the Customs Tarrif Act for that item RITC | ||
| INFO UQC | UQC for the Quantity indicated in INFO_MSR | ||
The RoDTEP programme would be executed by digitising the rebate amount in the form of transferable duty credit scrip to improve the ease of conducting business. The CBIC would keep track of such scrip for use in an electronic ledger.
To examine the RoDTEP Rates, it may be advisable to refer to the Handbook of Procedures' Appendix 4R, which was published by the Department of Commerce under DGFT notification No. 19/2015-20 on August 17, 2021. For more information, please visit this link: https://www.dgft.gov.in/CP/?opt=RoDTEP
All exporters are eligible for the benefit under the Scheme, regardless of their status with regard to the goods made in India. Additionally, there is no turnover threshold requirement for applying for benefits under the Scheme.
Except for apparel and made-ups (Chapters 61, 62, and 63), for which the RoSCTL scheme has been extended for the advantages, the RoDTEP scheme is applicable to all sectors.
No, Currently, SEZ and EOU Units, as well as exports made according to an advance licence, are not eligible for the incentive. The inclusion of exporters under the categories of SEZ, EOU, Advance Authorization, etc. and the RoDTEP rates for export items under such categories would, however, be determined later based on the recommendations of the RoDTEP Committee, according to para 4.55B of the FTP (inserted via DGFT Notification No. 19/2015-20 dated 17.08.2021).
According to DGFT Notification No. 19/ 2015-20, issued 17.08.2021, the exporter must maintain records to support the claims they make under the scheme. The CBIC, Department of Revenue, will set up a monitoring and audit system with an IT-based Risk Management System (RMS) to physically check the exporters' records on a sample basis. RMS will objectively choose representative cases for physical verification based on risk and other pertinent factors.