What is RoDTEP scheme?

RoDTEP scheme is notified with an Objective to neutralize the taxes and duties suffered on exported goods which are otherwise not credited or remitted or refunded in any manner. The benefit is given as percentage of FOB or fixed amount per unit of measurement as prescribed in the Appendix 4R to the Notification.

What industries are covered under the RoDTEP Scheme?

The RoDTEP scheme covers employment-oriented sectors like marine, leather, gems and Jewelry , 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.

Where can RoDTEP rates be accessed?

https://www.indiantradeportal.in

Features of RoDTEP scheme?

According to DGFT notification, the RoDTEP scheme support will be provided to eligible exporters at a notified rate as a percentage of Freight on Board (FOB) value. Rebates on certain export products will also be subject to a value cap per unit of the exported product.

It will be implemented by Customs through a simplified IT System. Rebates will be issued in the form of a transferable duty credit/electronic scrip (e-scrip) which will be maintained in an electronic ledger by the Central Board of Indirect Taxes and Customs (CBIC).

Employment-oriented sectors like marine, agriculture, leather, gems and Jewellery are covered under the scheme. Other segments like automobile, plastics, electrical/electronics, machinery are also getting support under the RoDTEP scheme.

Certain categories, which would not avail the benefits include export goods that are subject to minimum export price, restricted and prohibited items, deemed exports, supplies of goods manufactured by domestic tariff area units to SEZs, and products manufactured or exported by units situated in special economic zones.

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 digitization

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.

What is mandatory to claim RoDTEP?

W.e.f. 01.01.2021, it is mandatory for the exporters to indicate in their Shipping Bill whether or not they intend to claim RoDTEP on the export items. It has been categorically specified by the CBIC. If RODTEPY is not specifically claimed in the Shipping Bill, no RoDTEP would accrue to the exporter.

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

The documents required to apply for RoDTEP Scheme:

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

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How can RoDTEP be claimed?

RoDTEP would be issued in the form of transferrable e-scrips which will be maintained in an electronic credit ledger by the CBIC and could be used for paying Basic Customs Duty on import of goods or may be transferred electronically to other party. The benefit will not be in the form of direct credit to the bank account.

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. They 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. It will also 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 utilization 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.

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 such as:

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; ii. Electricity duty on purchase of electricity; iii. Mandi Tax/ Municipal Taxes/ Property Taxes; iv. Stamp duty on export documents; v. Un-creditable CGST/ SGST/ IGST/ Compensation Cess on items falling under [passenger transportation vehicles, food and beverages, rent-a cab, works contract services, etc.]

The Broad Procedure of Claiming the Benefit Of These Scrips Is As Under:

• To avail the scheme exporter shall make a claim for RoDTEP in the shipping bill by making a declaration.
•  Once EGM is filed, claim will be processed by Customs.
• Once processed a scroll with all individual Shipping Bills for admissible amount would be generated and made available in the users account at ICEGATE
• User can create RoDTEP credit ledger account under Credit Ledger tab. This can be done by IECs who have registered on ICEGATE with a DSC.
• Exporter can log in into his account and generate scrip after selecting the relevant shipping bills.