RoDTEP issues must be addressed quickly

The government has extended the existing rates for all items covered under the RoDTEP (Remission of Duties and Taxes on Exported Products) scheme for exports made till June 30, 2024. However, the remissions for the current financial year will be managed within the approved budget for the scheme, says the Commerce Ministry notification no. 33/2023 dated September 26, 2023.

The RoDTEP scheme was introduced in September 2021 for exports made with effect from January 1, 2021. The scheme intends to rebate central/state/local duties/taxes/levies that are not refunded under any other duty remission schemes. Under this scheme, rebate is granted to eligible exporters at a notified rate as a percentage of FOB (free on board) value with, for some items, a value cap per unit, or a fixed quantum of notified amount per unit, on export of the notified items. The categories of exports/exporters mentioned in para 4.55 of the FTP are not eligible for rebate under the scheme. Certain items were eligible for RoDTEP benefit only for exports till September 30, 2023. Now, the benefit is extended for all items till June 30, 2024.

The scheme is implemented through grant of rebate amount in the form of a transferable duty credit/electronic scrip (e-scrip), which is maintained in an electronic ledger by the Central Board of Indirect Taxes & Customs (CBIC). Necessary rules and procedure regarding grant of RoDTEP claim under the scheme, and implementation issues including manner of application, time period for application and other matters including export realisation, export documentation, record keeping, etc, are notified by the CBIC.  

 When the scheme was announced in September 2019, the finance minister said that the size of the package is Rs 50,000 crore but the budgetary allocations have been around a quarter of that figure. For 2023-24, the allocation is Rs 15,070 crore. In the 27 months till March 31, 2023, the support extended under the scheme is only Rs 27,018 crore. The scheme is compliant with the disciplines under the agreements with the World Trade Organization. So, it is not clear why the scheme must be restricted to exports till a specific date. Also, the reasons for limiting the entitlements based on the budget allocations appear flimsy because the government keeps boasting of collecting record revenues every now and then. Exporters are aggrieved that the rates for certain categories of items are not notified under the RoDTEP scheme. Many exporters feel that the notified rates do not fully reimburse the actual incidence of duties/taxes/levies. Besides, the exports under advance authorisations and exports by export oriented units (EOU) and by units in special economic zones (SEZ) are not covered under the scheme, although they also suffer the same levies/taxes/duties that other exporters suffer. The committee constituted to recommend the RoDTEP rates had prescribed some forms for collecting necessary data from advance authorisation holders and EOU/SEZ units, but the forms were so complicated that many preferred not to submit the data. Now, the committee has simplified the forms and is hoping to get enough data to make suitable recommendations. There are also some operational issues regarding surrender in cash of the amount proportionate to the unrealised part of export proceeds that need the attention of the CBIC.

Overall, the government has done well to extend the existing rates but should address the issues flagged by the exporters quickly.

Email: tncrajagopalan@gmail.com