Analysis of RoDTEP Scheme (Remission of Duties and Taxes on Exported Products Scheme)

Remission of Duties and Taxes on Exported Products Scheme (RoDTEP)

S. No.	Heading	Relevant Provision
1	Notification Number and issuance Date	Notification No. 19/2015-20 dated 17^th August, 2021
2	Objective	To replace the existing MEIS (Merchandise Exports from India Scheme)
3	Effective Date of commencement of Scheme	1st January, 2021
4	What is RoDTEP Scheme?	*The objective of Scheme is to refund, currently unrefunded.* RoDTEP scheme is notified for the remission of duties, taxes, and other levies at the Central, State, and local level which is borne on the exported goods manufactured in India. It also includes the incidence of taxes suffered post manufacturing of the goods i.e., in respect of the distribution of exported goods. The benefit is not available in respect of those duties or taxes which are otherwise exempted or remitted or credited.
5	Number of Products covered	Presently the benefit of rebate is applicable on various products presently 8,555 tariff lines being exported from India.
6	Rebate Calculations	Rebate shall be granted to all eligible at the notified rates as a percentage of FOB value with a value cap per unit of the exported goods. For certain export items, a fixed quantum of rebate amount per unit may also be notified.
7	Notified goods	Refer: https://www.dgft.gov.in/CP/?opt=RoDTEP
8	Realization of foreign exchange within the time limit prescribed under Foreign Exchange Management Act, 1999 (FEMA)	It is pertinent to note that the benefit of this scheme is allowed subject to the receipt of sale proceeds within the time allowed under the Foreign Exchange Management Act, 1999 failing which such rebate shall be deemed never to have been allowed. Although the rebate would not be dependent on the realization of the export proceeds at the time of issuance of the rebate, however, adequate safeguards would be put in place to avoid misuse on account of non-realization of the export proceeds.
9	Mechanism of Issuance of rebate	Scheme would be implemented through end-to-end digitization of issuance of rebate amount in the form of transferable duty credit/electronic scrip (e-scrip), which will be maintained in an electronic ledger by CBIC.
10	Nature of Rebate	The e-scrips can be used only for payment of duty of Customs leviable under First Schedule of Customs Tariff Act, 1975 i.e. Basic Customs Duty.

Ineligible Supplies/Categories/items under the scheme

The scheme is very restrictive as many supplies or items or categories under the Scheme have been disentitled for the Scheme as provided in para 4.55. Following are ineligible categories:

Exports of imported goods as per para 2.46 of FTP i.e., Import for Export
Exports through transshipments, meaning exports originating in third country but transshipped through India
Export products subject to minimum export price or export duty
Products restricted for exports under Schedule 2 of Export Policy in ITC (HS)
Products prohibited for exports 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 Customs Act, 1962 (i.e., MOOWR etc.)
Products manufactured or exported in discharge of export obligation against advance authorization or DFIA or special advance authorization issued under a duty exemption scheme of relevant FTP
Products manufactured or exported by 100% EOU
Products manufactured or exported by any of the units situated in FTZ, EPZ or SEZ
Products manufactured or exported availing the benefit of Notification No 32/1997- Customs (i.e., jobbing transactions)
Exports for which electronic documentation in ICEGATE EDI has not been generated or exports from non-EDI port
Goods which have been taken into use after manufacture (i.e., second-hand goods)

Monitoring, Audit and Risk Management System (RMS)

For the purpose of audit & verification, the exporter would be required to keep records substantiating claims made under this scheme. A monitoring system and audit mechanism with an IT based RMS would be put in place by the CBIC.