RoDTEP Scheme

The RoDTEP Scheme allows exporters to receive refunds on taxes and duties that are not exempted or refunded under any other scheme.

• Under the scheme, exporters receive refunds on the embedded taxes and duties previously non-recoverable.
• The chief aim of the scheme is to boost the export of goods that were poor in volume
• The scheme provides for rebates of Central, State, and Local duties/taxes/ levies which are not refunded under any other duty remission schemes.
• The RoDTEP scheme can be said to be a combination of the MEIS and the Rebate of State and Central Taxes and Levies (RoSCTL).
• Under this scheme, a refund would be claimed as a percentage of exports’ Freight On Board (FOB) value.

RoDTEP Scheme Objective

The objective of the RoDTEP Scheme is as follows:

• The Scheme’s objective is to refund, currently un-refunded:
• Duties/taxes/levies, at the Central, State, and local level, borne on the exported product, including prior stage cumulative indirect taxes on goods and services used in the production of the exported product and
• Such indirect Duties/taxes/levies in respect of the distribution of the exported product.

The rebate under the Scheme shall not be available in respect of duties and taxes already exempted or remitted or credited

Features of the RoDTEP Scheme

The following are the salient features of the RoDTEP Scheme.

• Remission of taxes/duties/levies
  • It covers duties and taxes levied at the central, state, and local levels that are not reimbursed under any other mechanism. Items that were under the MEIS and the RoSCTL are shifted to the RoDTEP.
• Automated refund system
  • Refunds will be issued to exporters as transferable duty credit/electronic scrips and maintained in an electronic ledger.
  • This can be used to pay basic customs duty on imported goods. The credits can also be transferred to other importers.
• Speedy clearance through digitalization
  • Faster clearance through a digital platform will be facilitated through a monitoring & audit mechanism, with an IT-based risk management system that would physically verify the exporters’ records.
• Scheme for all sectors
  • The scheme is applicable across all sectors.

Eligibility for RoDTEP Scheme

The following section discusses the eligibility to avail of benefits under the scheme.

• All sectors are covered under the scheme. Labor-intensive sectors will be accorded priority.
• Both manufacturer exporters and merchant exporters (traders) are eligible for the scheme.
• There is no turnover threshold for availing of benefits under the scheme.
• The exported products should have India as their country of origin to be eligible for benefits under the scheme.
• Special Economic Zone Units and Export Oriented Units are also eligible.
• The scheme also applies to goods that have been exported via courier through e-commerce platforms.

Note: Re-exported products are not eligible under this scheme.

Rates under the Scheme

The determination of ceiling rates under the Scheme will be done by a Committee in the Department of Revenue/Drawback Division with the suitable representation of the DoC/DGFT, line ministries, and experts, on the sectors prioritized by the Department of Commerce and Department of Revenue.

The overall budget/outlay for the RoDTEP Scheme would be finalized by the Ministry of Finance in consultation with the Department of Commerce (DoC), taking into account all relevant factors.

Rates of Tax Refunds

Under the Scheme, a rebate will be granted to eligible exporters at a notified rate as a percentage of FOB value with a value cap per unit of the exported product, wherever required, on the export of items that are categorized under the notified 8-digit HS Code.

For certain export items, a fixed quantum of rebate amount per unit may also be notified.

Rates of rebate/value cap per unit under RoDTEP will be notified as per the APPENDIX 4R: Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP)

In addition to necessary changes that may be brought about because of budget control measures mentioned above, efforts would be made to review the RoDTEP rates on an annual basis and notify them well in advance before the beginning of a financial year.

Ineligible Supplies/ Items/Categories under the Scheme

The following categories of exports/ exporters are not eligible for rebate under the RoDTEP Scheme:

• Export of imported goods covered under paragraph 2.46 of FTP
• Exports through trans-shipment, meaning exports that originate in a third country but are trans-shipped through India
• Export products that are subject to Minimum export price or export duty
• Products that are restricted for export under Schedule-2 of Export Policy in ITC (HS)
• Products that are prohibited from export under Schedule 2 of Export Policy in ITC (HS).
• Deemed Exports
• Supplies of products manufactured by DTA units to SEZ/FTWZ units
• Products manufactured in EHTP and BTP
• Products manufactured partly or wholly in a warehouse under section 65 of the Customs Act, 1962 (52 of 1962)
• Products manufactured or exported in discharge of export obligation against an Advance Authorization or Duty-Free Import Authorization or Special Advance Authorization issued under a duty exemption scheme of relevant Foreign Trade Policy
• Products manufactured or exported by a unit licensed as a hundred percent Export Oriented Unit (EOU) in terms of the provisions of the Foreign Trade Policy
• Products manufactured or exported by any of the units situated in Free Trade Zones or Export Processing Zones or Special Economic Zones
• Products manufactured or exported availing the benefit of the Notification No. 32/1997-Customs dated 1st April 1997.
• Exports for which electronic documentation in ICEGATE EDI has not been generated/ Exports from non-EDI ports
• Goods which have been taken into use after manufactureRoDTEP Scheme Guidelines

Documents Required to Apply for the RoDTEP Scheme

• Shipping Bills
• Electronic Bank Realization Certificate (eBRC)
• Digital Signature Certificate (DSC) – Class 3
• Registration cum Membership Certificate (RCMC)

Procedure to Apply for RoDTEP Scheme Online

The process of applying for the RoDTEP scheme is quite similar to that of the Rebate of State & Central Taxes and Levies (RoSCTL). The following steps can be implemented to apply for the RoDTEP scheme:-

• Log on to the ICE Gate website (icegate.gov.in)
• File an application using a Class 3 Individual type Digital Signature Certificate.
• Attach all the required documents mentioned above and link them to the application.

Procedure to Issue Duty Credit for Goods Exported under the RoDTEP Scheme

CBIC notifies the procedure to issue duty credit for goods exported under the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) vide Notifications No. 76/2021- Customs (N.T.) dated 23rd September 2021. The duty credit under the RoDTEP Scheme will be issued instead of remission of any duty chargeable on any material used in the manufacture of goods meant for exports, and where such tax is not exempted, remitted, or credited under any other scheme.

CBIC notifies the procedure to issue duty credit for goods exported under the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) vide Notifications No. 76/2021- Customs (N.T.) dated the 23rd of September 2021. The duty credit under the RoDTEP Scheme will be issued instead of remission of any duty chargeable on any material used in the manufacture of goods meant for exports, and where such tax is not exempted, remitted, or credited under any other scheme.

Important Announcement to Exporters

• CBIC announced that the value of goods for calculation of duty credit to be allowed under the RoDTEP Scheme would be the declared export FOB (Freight On Board) value or up to 1.5 times the market price of that item, whichever is less
• The duty credit will be issued in place of remission of any duty chargeable on any material used in manufacturing or processing goods meant for exports and where such tax is not exempted, remitted, or credited under any other scheme.
• Principal Commissioner of Customs or Commissioner of Customs may, after inquiry, pass an order to cancel duty credit or e-scrip if an exporter contravenes any of the provisions of the law.
• Suppose an amount of duty credit has been allowed more than what the exporter is entitled to. In that case, the exporter shall repay the amount allowed in excess, himself or on demand by the proper officer, along with interest.

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Conditions to Issue Duty Credit

As mentioned above,    Duty credit for goods exported under the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) shall be issued subject to the following conditions.

• Duty credit will be issued instead of remission of any tax, chargeable on any material used to manufacture goods for exports, and where such tax is not exempted under any other scheme.
• Duty credit will be issued against the export of goods notified in Appendix 4R of the foreign trade policy (FTP)
• Duty credit will be issued against the claim of duty credit under the RoDTEP Scheme made by an exporter by providing the appropriate declaration at the item level in the shipping bill or export bill in the customs automated system.
• Duty credit will be issued against the shipping bill or bill of export, presented under section 50 of the Customs Act, 1962 on or after the 1st day of January 2021, and where the order permitting clearance and loading of goods for exportation under section 51 of the Customs Act, 1962 has been made.
• Duty credit will be issued after the claim is allowed by Customs upon necessary checks, including based on risk evaluation through appropriate selection criteria, and after the filing of the export manifest or export report;
• Duty credit will be issued following rules or regulations about duty credit, e-scrip, or electronic duty credit ledger.

CondDutyn to Use duty Credit

CBIC announced that duty credit could be used for the payment of the duty of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) on goods when imported into India

Export Categories ineligible for  RoDTEP duty credit

The following export categories or sectors  will not be eligible for duty credit under the Scheme Remission of Duties and Taxes on Exported Products (RoDTEP):

• Goods that are restricted or prohibited for export under Schedule-2 of Export Policy in ITC-HS
• Export of imported goods covered under paragraph 2.46 of Foreign Trade Policy
• Exports through trans-shipment, meaning exports that originate in the third country but trans-shipped through India
• Goods subject to Minimum export price or export duty
• Deemed exports under Foreign Trade Policy
• Goods manufactured or exported by any of the units situated in Special Economic Zone/ Free Trade Warehousing Zone/Electronic Hardware Technology park/Bio-Technology park/ Export Processing Zone
• Goods manufactured or exported by a unit licensed as a hundred percent Export Oriented Unit.
• Goods exported under Advance Authorisation or Duty-Free Import Authorisation issued under the relevant Foreign Trade Policy.
• Goods manufactured and supplied by units in Domestic Tariff Area to units in Special Economic Zone/Free Trade Warehousing Zone.
• Goods manufactured in Special Economic Zone/Free Trade Warehousing Zone / Export Oriented Unit / Electronic Hardware Technology Park /Bio-Technology Park/ Export Processing Zone and exported through the DTA unit.
• Goods manufactured partly or wholly in a warehouse under section 65 of the Customs Act, 1962 (52 of 1962)
• Goods availing the benefit of the notification No. 32/1997-Customs, dated the 1st of April 1997
• Goods for which a claim of duty credit is not filed in a shipping bill or bill of export in the customs automated system
• Goods that have been taken into use after manufacture

Note: The duty credit allowed under the Scheme against the export of goods notified in the Appendix shall be subject to the realization of sale proceeds in respect of such goods in India within the period allowed under the Foreign Exchange Management Act, 1999 (42 of 1999); failing which such duty credit shall be deemed to be ineligible

Duty Credit for Exports made to Nepal, Bhutan, and Myanmar

CBIC announced that credit under the RoDTEP Scheme for exports made to Nepal, Bhutan, and Myanmar shall be allowed only upon realization of sale proceeds against irrevocable letters of credit in freely convertible currency established by importers in Nepal, Bhutan, and Myanmar in favor of Indian exporters for the value of such goods

Cancellation of Duty Credit

Suppose a person contravenes any of the rules about exports to which the duty credit relates. In that case, the Principal Commissioner of Customs or Commissioner of Customs having jurisdiction over the customs station of registration of the e-scrip will pass an order to cancel the duty credit or e-scrip.

If the e-scrip is so canceled, the duty credit amount in the e-scrip shall be deemed never to have been allowed, and the concerned officer of Customs shall proceed to recover the duty credit amount used in such e-scrip or transferred from such e-scrip.

The concerned officer of Customs may suspend the operation of the e-scrip or the electronic duty credit ledger of such exporter or any duty credit transferred from such e-scrip during the pendency of the inquiry.

Recovery of Amount of Duty Credit

If an amount of duty credit has been allowed more than what the exporter is entitled to, the exporter needs to repay the amount so allowed in excess, himself or on-demand by the proper officer, along with interest, at the rate as fixed under section 28AA

Suppose the exporter fails to repay the excess amount within fifteen days and interest. In that case, the proper officer of Customs will proceed with the recovery of the RoDTEp duty credit amount from the transferee as per section 142 of the Customs Act.

Recovery of the amount of duty credit where export proceeds are not realized

Suppose an amount of duty credit has been allowed to an exporter, but the exporter in India has not realized the sale proceeds in respect of such export goods within the prescribed period. In that case, the exporter needs to repay the amount of duty credit, along with interest, at the rate fixed under section 28AA within fifteen days of the expiry of the prescribed period.

In case any extension of the time limit for the realization of sale proceeds has been given by the Reserve Bank of India, the exporter produces evidence of such extension to the concerned officer. If the sale proceeds are not realized in such an extended period, the exporter needs to repay the duty credit, along with interest, within fifteen days of the expiry of the prescribed date.

• If a part of the sale proceeds has been realized, the amount of duty credit to be recovered shall be the amount equal to that portion of the amount of duty credit allowed, which bears the same proportion as the portion of the sale proceeds not realized bears to the total amount of purchase proceed.
• If the exporter fails to repay the duty credit amount within fifteen days, the duty credit shall be deemed never to have been allowed, and it shall be recovered, along with interest.
• The concerned officer of Customs will proceed with the recovery of said duty credit amount from the transferee according to section 142 of the Customs Act.

Click here to get the official announcement of CBIC

CBIC Notifies Amendments to Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) vide a Notification dated the 26th of September, 2022. Click here to get the Notification