What is the News? Exporters are upset over the inordinate delay in the notification of the rates under the RoDTEP (Remission of Duties and Taxes on Exported Products) Scheme.
About Remission of Duties and Taxes on Exported Products(RoDTEP) Scheme:
- Ministry of Commerce and Industry announced the RoDTEP scheme in the year 2020. It came into effect on January 1st, 2021.
- The scheme replaced the Merchandise Export from India Scheme(MEIS). MEIS was not compliant with the rules of the World Trade Organisation(WTO).
- US lodged a complaint against India’s MEIS scheme in WTO. Further, a dispute settlement panel of WTO ruled against India’s use of MEIS. It had found the duty credit scrips awarded under the scheme to be inconsistent with WTO norms.
- Purpose: The RoDTEP scheme will refund the embedded central, state, and local duties or taxes to exporters that were previously non-recoverable. Such as:
- Firstly, the central & state taxes on the fuel used for transportation of export products
- Secondly, the duty levied by the state on electricity used for manufacturing
- Thirdly, mandi tax levied by APMCs
- Lastly, toll tax & stamp duty on the import-export documentation.
- Exporters will receive the refund of taxes on exports in exporters’ ledger account with the Customs department. Further, exporters can utilize this credit to pay basic customs duty on imported goods. They can also transfer credits to other importers.
- Coverage: The scheme covers all export goods starting from January 1, 2021.
- Significance of the scheme: The scheme would lead to the cost competitiveness of exported products in international markets and better employment opportunities in export-oriented manufacturing industries.
Source: The Hindu