Government extends benefit of RoDTEP scheme to all export goods from January 1st

The central government has decided to extend the benefit of tax refund scheme RoDTEP to all export goods from January 1, 2021. The announcement was made by the Union Finance Ministry on December 31, 2020.  

The government had approved the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme in March 2020 for reimbursement of taxes and duties to exporters to give a boost to the country’s dwindling exports. 

Now, the government has decided to extend the benefits of the RoDTEP scheme to all export goods with effect from January 1, 2021 in a major effort to boost exports. 

Key Highlights 

•Under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, the exports will get a refund of the embedded Central, State and local duties and taxes that were so far not being refunded, putting India's exporters at a disadvantage. 

•With the latest order, the refund would be credited directly in the exporter’s ledger account with customs and used to pay basic customs duty on imported goods. The credited amount can also be transferred to other importers. 

•The Department of Commerce will notify the rates of the RoDTEP scheme, based on the recommendation of a committee chaired by former commerce and home secretary GK Pillai. The committee would be submitting its final report shortly. 

•The Finance Ministry said in a statement that an exporter who wants to avail the benefit of the RoDTEP scheme shall be required to declare his intention for each export item in the shipping bill. The scheme will be allowed, subject to specified conditions and exclusions.

•The notified rates, irrespective of the date of notification, will be brought into effect from January 1, 2021 for all eligible exports of goods.

Background

India's exports had declined by 17.76 percent to $173.66 billion during the April-November period in this fiscal.

The Federation of Indian Export Organisations (FIEO) President Sharad Kumar Saraf said notification of RoDTEP rates is crucial as it would help an exporter to decide the price of their products.

He also added saying that the incentives under the MEIS (Merchandise Export from India Scheme) should also be extended to those goods for which the rates have to be notified from time to time.