The long wait is finally over. The Centre last week notified rates under the RoDTEP (Refund of Duties and Taxes on Exported Products) scheme, under which exporters are provided with refunds on taxes and levies borne on exported products. This scheme was approved last year to replace the Merchandise Exports from India Scheme (MEIS), and now the much-delayed announcement of the rates is, no doubt, a big relief to the sector.
The rates under RoDTEP scheme for different sectors are 0.5 percent, 2.5 percent and 4 percent. These rates will apply to 8,555 tariff lines. The Ministry of Finance in consultation with the Department of Commerce will decide the overall outlay for the scheme. Benefits under the scheme will be available to eligible exporters at a notified rate as a percentage of Freight On Board value. For certain export items, a fixed quantum of rebate amount per unit may also be notified.
RoDTEP scheme is based on the 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. These rates are WTO compatible and no doubt, this scheme will benefit our exporters. It is important, however, that the rates are quickly uploaded in the system. An exporters’ body also pleaded for coverage of various sectors such as Pharma, Organic & Inorganic chemicals, Article of Iron & Steel and Iron & Steel under RoDTEP immediately with effect from January 1, 2021.