The Central Government has amended Foreign Trade Policy 2015-20 (FTP) for introducing a Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP). The scheme for zero-rating of exports will boost India’s exports & competitiveness in the global markets.
A sub-para (e) is inserted in para 4.01 of the Foreign Trade Policy 2015-20 as below:
“(e) Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) notified by the Department of Commerce and administered by the Department of Revenue.
It may be noted that Government is leaving no stone unturned to support domestic industry and make it more competitive in the international markets. Export-centric industries are being reformed and introduced to better mechanisms so as to increase their competitiveness, boost exports, generate employment and contribute to the overall economy.
Remission of Duties and Taxes on Exported Products (RoDTEP) is one such reform, based on the globally accepted principle that taxes and duties should not be exported, and taxes and levies borne on the exported products should be either exempted or remitted to exporters.
Objective and operating principles of ReDTEP Scheme:
- The scheme’s objective is to refund, currently un-refunded Duties/ taxes/ levies, at the Central, State & local level, borne on the exported product, including prior stage cumulative indirect taxes on goods & services used in production of the exported product, and Such indirect Duties/ taxes/ levies in respect of distribution of exported products.
- Rebate under the Scheme shall not be available in respect of duties and taxes already exempted or remitted or credited.
- The determination of Ceiling rates under the scheme will be done by a Committee in the Department of Revenue.
- The overall Budget for the RoDTEP scheme would be finalized by the Ministry of Finance.
- The RoDTEP support will be available to eligible exporters at a notified rate as a percentage of Freight On Board (FOB) value. Rebate on certain export products will also be subject to value cap per unit of the exported product.
- The rebate allowed is subject to the receipt of sale proceeds within the time allowed under the Foreign Exchange Management Act, 1999 failing which such rebate shall be deemed never to have been allowed.
- Categories of exports like exports through trans-shipment, deemed exports, goods taken into use after manufactured, products manufactured in EHTP and BTP, etc are not eligible for rebate under ReDTEP subject to Governments modification in the list at the later date.
- The scheme is to be implemented by Customs through a simplified IT System. The rebate 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 & Customs (CBIC).
- The e-scrips would be used only for payment of duty of Customs leviable under the First Schedule to the Customs Tariff Act, 1975 Viz. Basic Customs Duty.
- Monitoring and audit mechanism with an IT-based Risk Management System (RMS) would be put in place by the CBIC for physically verify the records of exporters on a sample basis.
Identified export sectors and rates under RoDTEP cover 8555 tariff lines in addition to similar support being extended to apparel and made-ups exports under the RoSCTL scheme of the Ministry of Textiles.
Employment Oriented Sectors like Marine, Agriculture, Leather, Gems & Jewellery, etc. are covered under the Scheme. Other sectors like Automobiles, Plastics, Electrical / Electronics, Machinery, etc. also get support. The entire valve chain of textiles also gets covered through RoDTEP & RoSCTL
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