RoDTEP scheme – INSIGHTSIAS

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GS Paper 2

Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

 

Context:

The Centre has notified the rates and norms for the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.

  • A budgetary allocation of ₹12,454 crore has been made for 2021-22 under the scheme which covers 8,555 tariff lines, accounting for about 75% of traded items and 65% of India’s exports.

 

About the scheme:

The scheme was announced in 2020 as a replacement for the Merchandise Export from India Scheme (MEIS), which was not compliant with the rules of the World Trade Organisation.

The scheme would refund to exporters the embedded central, state and local duties or taxes that were so far not being rebated or refunded and were, therefore, placing India’s exports at a disadvantage.

 

Key features:

  1. To enable zero rating of exports by ensuring domestic taxes are not exported, all taxes, including those levied by States and even Gram Panchayats, will be refunded under the scheme.
  2. The rebates under RoDTEP is WTO-compliant as per legal advice, range from 0.5% to 4.3% of the Free On Board value of outbound consignments.
  3. The lowest rate is offered on items like chocolates, toffees and sugar confectionary, while yarns and fibres have been granted the highest rate.
  4. Steel, pharma and chemicals have not been included under the scheme because their exports have done well without incentives.

 

Significance:

  • Indian exporters will be able to meet the international standards for exports as affordable testing and certification will be made available to exporters within the country instead of relying on international organizations.
  • Also under it, tax assessment is set to become fully automatic for exporters. Businesses will get access to their refunds for GST via an automatic refund-route.
  • This would increase the economy for the country and working capital for the enterprise.

 

Insta Curious:

Did you know that the RoDTEP scheme had kicked in from January 1, replacing the earlier Merchandise and Services Export Incentive Schemes (MEIS and SEIS) that were in violation of WTO norms? Reference: read this.

 

InstaLinks:

Prelims Link:

  1. Key features of the scheme.
  2. Benefits.
  3. Eligibility.

Sources: the Hindu.

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