Understanding the benefits of RoDTEP scheme: A guide for Indian exporters

RoDTEP, an abbreviation for Remission of Duties or Taxes on Export Products, is a recent initiative by the Indian Government. This scheme was introduced through an amendment to the Foreign Trade Policy 2015-20, and it became effective for exports starting January 1, 2021. The primary aim of this scheme is to offset the taxes and duties incurred on exported goods that wouldn't otherwise be credited, reimbursed, or refunded in any way and are integrated into the exported goods.

Under this scheme, a refund is provided for all concealed central, state, and local duties, taxes, and levies associated with the goods exported which haven't been reimbursed through any existing program. This includes not only the exporter's direct expenses and the accumulated indirect taxes on goods incurred in earlier stages¹.

The RoDTEP scheme aims to provide refunds for the following currently unreimbursed elements:
a. Duties, taxes, and levies imposed at the central, state, and local levels on the exported product, which includes the cumulative indirect taxes incurred in prior stages related to the production of the exported product.
b. Indirect duties, taxes, and levies relevant to the distribution of the exported product.
It's important to note that this scheme does not apply to duties and taxes that have already been exempted, remitted, or credited.

1. Within the framework of this scheme, various taxes and duties, including Value Added Tax (VAT), Coal tax, Central Excise Duty (CED), Mandi tax, and others, are now eligible for full reimbursement. All the products that were previously covered by the MEIS scheme and RoSTCL are now under the purview of the new RoDTEP scheme. This provides exporters with significant financial empowerment and flexibility, motivating and enabling them to increase their exports across national borders.

2. Exporters will receive their refunds through an electronic ledger using transferable electronic credits. These electronic credits will be managed and overseen through the electronic ledger mentioned earlier and disbursed to exporters when they use the scheme. Automating this entire reimbursement process enhances its efficiency, making it far more streamlined and efficient than a traditional offline process involving extensive paperwork.

3. The implementation of a fully automated digital platform for this scheme expedites the procedures significantly compared to traditional offline methods. The electronic validation and security checks for documents submitted by exporters on the platform will ensure the integrity and efficiency of the process, resulting in faster and more streamlined transactions than previously experienced.

4. The scheme encompasses all industrial sectors in India, enabling them to export their products globally. A dedicated committee has been made responsible for aligning the scheme with the specific needs of various industrial sectors. Their role involves educating these industries about the scheme's advantages and assisting them in navigating the process to ensure a smooth and hassle-free application. This approach is highly advantageous for the Indian industrial landscape, as it opens opportunities for all sectors to offer resources to international markets.

Below is the eligibility criteria of the scheme³:
• The RoDTEP scheme extends its advantages to all industries, including the textile sector. Industries with a labour-intensive focus that already receive benefits through the MEIS Scheme will be given priority.
• This program is open to both manufacturer exporters and merchant exporters (traders).
• There is no specific minimum revenue requirement for eligibility under the RoDTEP. However, goods that are intended for re-export are not eligible for this program.
• To qualify for the benefits, the exported goods must have their origin in India.
• Special Economic Zone Units and Export-Oriented Units are also entitled to claim the benefits offered by this scheme.
• The RoDTEP scheme also applies to products exported through courier services using e-commerce platforms.

Some of the categories that are not eligible for rebates under the RoDTEP scheme are²:

i. Exports of goods that were originally imported for export purposes
ii. Exports involving trans-shipments refer to goods originating in a third country but rerouted through India
iii. Exported products are subject to a minimum export price or export duty
iv. Products restricted or prohibited for export
v. Deemed exports
vi. Supplies of products made by units in the Domestic Tariff Area (DTA) to Special Economic Zone (SEZ) or Free Trade and Warehousing Zone (FTWZ) units
vii. Products manufactured in Export-Oriented Units (EOUs) under the Electronic Hardware Technology Park (EHTP) and Bio-Technology Park (BTP)
viii. Products made partially or entirely within a warehouse, such as Manufacture and Other Operations in Warehouse (MOOWR)
ix. Goods manufactured or exported to fulfil export obligations under advance authorisations, Duty-Free Import Authorizations (DFIA), or Special Advance Authorizations issued within a duty exemption scheme
x. Goods manufactured or exported by units licensed as 100% Export Oriented Units (EOUs)
xi. Goods manufactured or exported by units located in Free Trade Zones (FTZ), Export Processing Zones (EPZ), or Special Economic Zones (SEZ)
xii. Exports for which electronic documentation in ICEGATE EDI has not been generated or exports originating from non-EDI ports
xiii. Second-hand goods, which are goods put into use after manufacturing

• Export declarations
• Electronic Bank Realization Certificate (e-BRC)
• Digital Signature Certificate (DSC) - Class 3
• Certificate Combining Registration and Membership (RCMC)

Below are the commonly followed steps to avail benefits under this scheme⁵:

The scheme offers eligible exporters a rebate, which will be granted at a specified rate as a percentage of the Free on Board (FOB) value and a value cap per unit of the exported product, as required. This applies to items categorised under the notified 8-digit HS Code. However, certain export items may also specify a fixed rebate amount per unit. The rebate granted is contingent upon the receipt of sale proceeds within the timeframe prescribed by the Foreign Exchange Management Act of 1999. If this condition is not met, the rebate will be considered as if it was never granted. It's important to note that the rebate is not contingent on the realisation of export proceeds at the time when the rebate is issued.