RoDTEP
- ECONOMY
News:
RoDTEP: Increase of 10%
in funds could help cover all sectors in FY25
What's
in the news?
●
The budgetary allocation for the popular
export benefit scheme, Remission of Duty and Taxes on Exported Products
(RoDTEP), is likely to get a 10 percent increase in 2024-25, over the ₹15,070
crore allocated last fiscal, which may allow the Commerce Department to extend
the scheme for the iron & steel, pharmaceuticals and chemicals sectors for
the entire financial year.
Key
takeaways:
●
The RoDTEP scheme, announced in January
2021 as a replacement for the
WTO-incompatible MEIS scheme, remits embedded duties/taxes on inputs to
exporters.
●
These include VAT on fuel used in
transportation, mandi tax and duty on electricity used during manufacturing,
and other input taxes that are not rebated under other schemes.
RoDTEP:
●
RoDTEP stands for Remission of Duties and Taxes on Export Products.
●
It is a new scheme that is applicable with
effect from January 1st, 2021, formed to replace the existing MEIS (Merchandise
Exports from India Scheme).
●
The scheme will ensure that the exporters receive the refunds on the
embedded taxes and duties previously non-recoverable.
●
The scheme was brought about with the
intention to boost exports which
were relatively poor in volume previously.
Features:
●
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.
●
The rebates under RoDTEP are WTO-compliant as per legal advice,
ranging from 0.5% to 4.3% of the Free On Board value of outbound consignments.
●
The lowest rate is offered on items like
chocolates, toffees and sugar confectionery, while yarns and fibers have been
granted the highest rate.
●
Now, the sectors such as pharmaceuticals, chemicals and iron & steel sectors
were added to the scheme to promote their exports.
Eligibility
●
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.