Rodtep reimbursements: Govt likely to guide industry on documentation

The government plans to handhold the industry to help them familiarise with adequate documentation that they need to maintain for the Remission of Duties or Taxes on Export Products (RoDTEP) scheme-related reimbursements, a senior government official said.

This is because last year, the United States (US) and the European Union (EU) had imposed countervailing or anti-subsidy duty against some products as retaliation against India’s export boosting scheme.

The RoDTEP scheme allows refunds of the embedded non-creditable central, state and local levies paid on inputs to exporters and is compliant with World Trade Organisation (WTO) norms. Government officials believe that the anti-subsidy duty was imposed on Indian products because the industry was not able to show adequate proof of the tax reimbursements during investigation by the foreign countries. This, for instance, made the US authorities believe that Indian exporters receive subsidies under the RoDTEP scheme, which is against global trade rules. 

Countervailing duties are imposed on imported goods to offset the embedded subsidies that exporters of a particular country avail.

“During an investigation for countervailing duty, investigators (from another country) come to India for plant visits and also ask for relevant documents. The ability to show documents is crucial,” a senior government official told Business Standard.

“When investigators visit, exporters should say RoDTEP is a remission-based scheme and to that extent, they should be able to show documents such as electricity, state-level fuel cost (VAT), among others. We are taking steps for general awareness building among exporters and are working on a process to familiarise exporters with the entire requirements,” the official said. The RoDTEP scheme was rolled-out three years ago by the commerce and industry ministry. 

The scheme replaced the controversial Merchandise Exports from India Scheme (MEIS), after a WTO ruling stated that the scheme violated the provisions of the global trade body by giving export subsidies for a wide range of goods. According to government officials, the scheme is not a case of subsidy that is given to exporters, but remission of taxes and duties or levies, which are not being reimbursed by any other alternative.

 

AWARENESS BUILDING-STEPS

• Last year, US, EU had imposed countervailing duty against some products as retaliation against RoDTEP
• Govt believes this was because industry was not able to show adequate proof of the tax reimbursements during investigation for countervailing duty
• Govt taking steps for general awareness building among exporters on maintaining necessary documents
• RoDTEP kicked-in from January 1, 2021.
• It refunds embedded non-creditable central, state and local levies paid on inputs to exporters. Such taxes were not being refunded