India’s cabinet recently approved the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) under which a mechanism would be created for reimbursement of all taxes or duties or levies that are currently not being refunded under any other mechanism, but which are incurred in the process of manufacture and distribution of exported products.
The approval came from the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi.India's cabinet recently approved the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) under which a mechanism would be created for reimbursement of all taxes or duties or levies that are currently not being refunded under any other mechanism, but which are incurred in the process of manufacture and distribution of exported products.#
The scheme is going to boost the domestic industry and Indian exports providing a level playing field for Indian producers in the international market, according to an official release.
Under the scheme, an inter-ministerial committee will determine the rates and items for which the reimbursement of taxes and duties would be offered. In line with the ‘Digital India’ project, refund under the scheme, in the form of transferable duty credit/electronic scrip will be issued to the exporters, which will be maintained in an electronic ledger.
The scheme will be implemented with end-to-end digitisation.
The refunds under the RoDTEP scheme would be a step towards ‘zero-rating’ of exports, along with refunds such as drawback and integrated goods and services tax (IGST). This would lead to cost competitiveness of exported products in international markets and better employment opportunities in export-oriented manufacturing industries.
At present, GST taxes and import/customs duties for inputs required to manufacture exported products are either exempted or refunded.
However, certain taxes/duties/levies are outside GST, and are not refunded for exports, such as, value-added tax on fuel used in transportation, mandi tax and duty on electricity used during manufacturing. These would be covered for reimbursement under the RoDTEP Scheme.
The sequence of introduction of the scheme across sectors, prioritisation of the sectors to be covered, degree of benefit to be given on various items within the rates set by the committee will be decided and notified by the department of commerce.
The rebate would be claimed as a percentage of the Freight On Board (FOB) value of exports.
A monitoring and audit mechanism, with a risk management system (RMS), would be put in to physically verify the records of the exporters. As and when the rates under the RoDTEP scheme are announced for a tariff line/ item, the Merchandise Exports from India Scheme (MEIS) benefits on such tariff line/item will be discontinued.
Fibre2Fashion News Desk (DS)
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "UBM China (Shanghai)")
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
