All EOU, AAH, SEZ exports during extended period should get Rodtep benefits

Rodtep scheme seeks to refund the duties/taxes/levies, at Central, State and local level, borne on manufacture and distribution of the exported product, which are not rebated through any other schemes

The Commerce Ministry has notified extension of the Rodtep (Remission of Duties and Taxes on Export Products) scheme for export of products manufactured by advance authorisation holders (AAH), export oriented units (EOU) and units in special economic zones (SEZ) retrospectively from January 1, 2025, to February 5, 2025. This will give many exporters some money they were not expecting but the way the government has gone about it is quite surprising, because this extension should have come before December 31, 2024.

 

Rodtep scheme seeks to refund the duties/taxes/levies, at the Central, State and local level, borne on the manufacture and distribution of the exported product, which are not rebated through any other schemes.  The scheme was introduced in 2021 but exports by AAH, EOU and SEZ units were made eligible with reduced entitlements under the scheme only from March 11, 2024, to December 31, 2024. Although no extension of the scheme came for these select categories, ICEGATE, the Customs portal for electronic transactions initially ran a message that the scheme is extended till January 15, 2025. This caused widespread confusion as highlighted in these columns. Later, the ICEGATE ran messages about extension of the scheme till January 25, 2025, and thereafter till February 5, 2025, for the select categories of exporters but no notifications came through extending the scheme beyond December 31, 2024.

 

In the absence of any notifications, many exporters did not opt for the scheme in the shipping bills and many Customs field formations refused to allow the AAH, EOU SEZ units to opt for the scheme. However, some exporters did tick the appropriate box opting for the scheme and in some cases, the Customs had even generated the scroll for grant of duty credits under the scheme. Now, it appears the exporters who opted for the scheme, when no legal entitlement through a notification existed, will get the benefits for their exports till February 5, 2025, whereas the exporters who went by the correct legal position and did not opt for the scheme in the shipping bill will have to wait for instructions from the government on what they need to do to get their entitlements for exports made from January 1, 2025, to February 5, 2025. The best course of action would be for the government to automatically allow the entitlements against all shipping bills filed during the relevant period by the select category of exporters whether they had opted for the benefits under the scheme or not. Otherwise, the exporters who strictly complied with the law may have to go for amendment of shipping bills and if that does not work, approach the courts. 

Para 4.54 (iv) of the Foreign Trade Policy 2023 says that the overall budget/outlay for the Rodtep Scheme would be finalized by the Ministry of Finance in consultation with the Department of Commerce, taking into account all the relevant factors. It 

appears the Finance Ministry was reluctant to continue the scheme for exports by AAH, EOU and SEZ units beyond December 2024, but has subsequently thought fit to relent.  However, the ICEGATE continued to run the messages about continuation of the scheme till February 5, 2025, without any legal back up. The way the government has gone about this issue speaks poorly about the coordination between its various wings. 

 

Email : tncrajagopalan@gmail.com