What are the new RoDTEP Rates and Guidelines

Published On: 07-Sep-2021

For the past few years, the Government has been highly focusing on setting up a budget for the export promotion scheme. The time has finally come, and Indian Exporters cannot wait to grasp on the opportunity that RoDTEP Rates and Guidelines 2021 will bring forward. According to the commerce ministry’s mainstream pronouncement, the new export promotion scheme budget is 12.5 Crore Rupees. This budget comprises up to 8555 items that are majorly exported from India to trading partners like the USA, UK, Russia, China, and Japan.

By definition, the RoDTEP Scheme is a remission and refunding program that allows exporters to regain the amount that was spent on export duties and taxes, including both central and state duties. According to the research, the RoDTEP program puts only exporters on safe ground. Releasing guidelines to such a scheme will bring loss to the Government. However, one of the main purposes behind such a scheme is to improvise the “exports” of products in India. This will bring the trade balance of India near to the surplus in future ahead, according to the economic experts.

Following is a brief guide on RoDTEP Rates and Guidelines brought to you by Cybex experts:

What type of duties and taxes does the RoDTEP Scheme cover?

To begin with, Indian exporters are finding RoDTEP as a disadvantage from a long-term point of view. For example, the scheme doesn’t cover goods purchased or services delivered, including GST. One can only avail of GST-based products and services through ITC, Input Tax Credit. Meaning, for such products, the tax value can only be decreased but not fully refunded.

For now, the RoDTEP scheme works in support of duties and taxes of the following nature:

Central, Local, and State Level Duties, Levies, and Taxes sustained on products ready for export.
The scheme also covers refunding all indirect taxes, duties, and levies on the further distribution of exported products.

What are the advantages of the RoDTEP Scheme?

For the most part, the RoDTEP scheme is priorly activated to improve the exports of India. As a result, the scheme offers multiple advantages to the mainstream exporters. To mention a few, check out the following:

Any item (packed for exports) with an 8-digits long digital HS Code will receive a refund based on per unit value cap + notified rate calculated via FOB Value percentage.
Refunds for particular products will be based on a “per unit” rate.
Exporters can apply for a refund or rebate requests on export-ready products, even in the absence of sales proceedings.
The above guidelines cancel out the Foreign Exchange Management Act, 1999 guideline, which puts time-based barriers on refund of export-ready goods depending on receipt of sales proceedings.
All transactions and refunds made under the RoDTEP scheme will be implemented through a digital process for security purposes.
RoDTEP scheme delivered benefits and refunds remains transferable in e-Scrips which can be further used by traders to pay for import duties or basic custom duties.

Is my business eligible for the RoDTEP Scheme?

The RoDTEP scheme is applicable for exporters excluding sectors for pharmaceuticals, organic and inorganic chemicals, and steel.
Special Economic Zones or SEZ are excluded from the scheme (SEZ are distinctive business areas where basic laws do not apply as they have distinctive set of rules and regulations by the Government).
Export-Oriented Units which engage in reconditioning of goods are also excluded.
Any exports under Advance Authorization Scheme remain ineligible for RoDTEP Scheme to avoid unfair advantage to any exporter in India.
This scheme will give major priority to labour-intensive sectors.
Your business does not need pre-set turnover to apply for RoDTEP.
Export-ready products with “origin as India” will be able to achieve the benefits of this scheme.
It does not remain applicable in the context of re-export practice.