Overview
The RoDTEP Scheme came into existence because the USA filed a complaint against India at the World Trade Organization (WTO). USA argued that export subsidies like the MEIS scheme given by GOI give undue benefits to Indian exporters and it is against the WTO rules. Consequently, India lost the case at WTO, and the ruling was in favor of the USA. It meant that now India had to stop the MEIS scheme and come up with a new WTO-compliant scheme to help Indian exporters. Hence, the Finance Minister in her Budget Speech on 1st February 2020 announced that the Scheme for Remission of duties and taxes on export products would be launched. Consequently, the RoDTEP Scheme was approved by the Union Cabinet on 13th March 2020 and it came into effect on 1st January 2021 and will be until 2025.
What is the RoDTEP Scheme?
Under the RoDTEP Scheme, the exporters can get the refund of embedded central, state, and local duties or taxes that were not getting refunded under any of the existing schemes earlier. It is expected that the scheme will significantly impact India's competitiveness in the international market in the next 5 to 10 years and would work on the principle that taxes/duties should not be exported, It should either be exempted or remitted to exporters. Implementation of the RoDTEP Scheme is done by the schemes earlier. It is expected that the scheme will significantly impact India's Customs, Icegate Portal. On 17th August 2021, Government released the guidelines and benefit rates under RoDTEP Scheme for 8555 tariff lines. The rebate rate varies from 0.5% to 4% of FOB value with a cap on value per unit on products where it is required. Below is a diagram showing the history of export promotion schemes, for a better understanding of their evolution.
Watch this short video on RoDTEP Scheme which explains the RoDTEP Scheme and application procedure as per the latest Government notification & finally, how can we at Afleo Consultants help you in getting your RoDTEP benefits from the Govt.
Features of RoDTEP Scheme
Currently, only the GST and the import customs duties levied on inputs required for the manufacturing of export products are either exempted or refunded in some or another way. Input tax credit (ITC) of GST paid is available, and also if exported on payment of duty then IGST refund can be claimed. Import Custom duties on raw materials are exempted through the Advance Authorization scheme or refunded through the Duty Drawback scheme. However, still, there are many duties and taxes levied by the Central and State government which are not refunded. It adds up to the final cost of resultant products and makes Indian products uncompetitive in the global market.
The following features of the RoDTEP Scheme has been given below. (Refer to the image)
Refund of Embedded Duties and Taxes
The RoDTEP Scheme aims to refund all those hidden taxes and levies, For example:
-
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- Central & state taxes on the fuel (Petrol, Diesel, CNG, PNG, and coal cess, etc.) used for
transportation of export products. - The duty levied by the state on electricity used for manufacturing.
- Mandi tax levied by APMCs.
- Toll tax & stamp duty on the import-export documentation. Etc.
- Central & state taxes on the fuel (Petrol, Diesel, CNG, PNG, and coal cess, etc.) used for
The Scheme will ensure that the Exporter only exports goods and services, not any kind of taxes, and the RoDTEP Scheme would cover all indirect Central & State taxes that are not reimbursed in any existing scheme.
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WTO Compliant Scheme
The RoDTEP Scheme is WTO compliant since it is not an additional Incentive, it is just the refund of hidden taxes. The RoDTEP Scheme will help the exporters to meet international standards and make their goods cost-competitive in the international market by assured duty benefits.
Ineligible Supplies / Items / Categories under the RoDTEP scheme
The RoDTEP Scheme would operate in a budgetary framework for each financial year and a 12,400 Cr outlay has been announced for the FY 2021-22.
Find the list of ineligible goods under the RoDTEP Scheme.
- Export of imported goods is given under paragraph 2.46 of FTP.
- The goods which are restricted for export beneath “Schedule-2 of Export Policy in ITC (HS).
- Goods which are banned for export beneath “Schedule-2 of Export Policy in ITC (HS).
- Supplies of products manufactured through DTA units to SEZ/FTWZ units.
- Export of goods taken into use after manufacturing.
- The Exports for which the electronic documentation in ICEGATE EDI has not been made.
- The exported goods claiming the benefits of notification No. 32/1997- Customs dated 1st April 1997.
- The goods are exported from Free Trade Zones (FTZ) Export Processing Zones(EPZ) or Special Economic Zones(SEZ).
- The goods obtained or exported through EOU & produced in EHTP and BTP.
- Deemed Exports.
- The Export good is subjected to a minimum export price or export tax.
- Products manufactured partly or wholly in a warehouse beneath section 65 of the Customs Act, 1962 (52 of 1962).
- Goods exported under Advance License/Special advance license or tax-free import authorization.
Introduction of RoDTEP Scheme to Chemicals, Pharmaceuticals, Iron & Steel Exporters
The government has extended the RoDTEP scheme to Chemical, Pharma & Iron & steel Exporters covering chapters 28,29,30 & 73 of ITC HS code.
The Rate of Incentive is in the range of 0.5% to 2%, which varies as per the ITC HS Code.
The majority of the Items are given 0.8% Incentive.
As per the current notification, this scheme will only be applicable for all Exports made after 15.12.2022 till 30.09.2023
We request all our Clients, Kindly Please make all the necessary declarations at the time of Filing Shipping Bills & Do not forget to tick YES for RoDTEP.
To claim RoDTEP Incentives, Exporters need to get a Class - 3 Digital Signature along with mandatory Registration on the Icegate Website.
Procedure to avail the benefits under RoDTEP Scheme
There are the four mandatory steps to avail the benefits under RoDTEP Scheme as follows -
Declaration in the Shipping Bills -
It is mandatory for the exporters to indicate in their Shipping Bill whether or not they intend to claim RoDTEP on the export items from 01/01/2021. Unlike Drawback, there will be no need to declare any separate code or schedule serial number for RoDTEP.
The exporter will have to make the following declarations in the SW_INFO_TYPE Table of the Shipping Bill for each item:
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- Additionally, for every item where “RODTEPY” is claimed in INFO CODE, a declaration has to be submitted in the Statement Table of the Shipping Bill as below.
ICEGate registration
The exporter has to register on ICEGate to get the login Id and Password with the help of an Email id, Mobile number, and with an Import-Export Code.
[Please refer to our detailed step-by-step Guide for Icegate Registration Process - https://afleo.com/icegate-registration/]
Creation of the RoDTEP Credit Ledger
To avail of the benefits under RoDTEP exporter has to create first the RoDTEP credit ledger account by logging onto the ICEGate portal i.e. using Class 3 DSC. The following information is available in the ledger account -
- Scroll Details
- Scrip Details
- Transaction Details
- Transfer Scrips
- Approved Scrips Transfer
Application procedure and scroll generation
- An application shall be filed online using a Class 3 Individual type Digital Signature Certificate on ICEGate Website (https://www.icegate.gov.in/).
- The refund under RoDTEP Scheme is in the form of electronic duty credit scrip which is transferable or can be utilized for self-consumption post-generation of Scrip.
- The RoDTEP scrolls would be generated on FIFO (First in first out) basis w.e.f. 01/01/2021.
Watch this video on RoDTEP Scheme which explains What are the duties & taxes going to be refunded? Expected Incentive rates? When is it going to be applicable? Who all are eligible to claim? Its application process & finally how can we at Afleo Consultants help you in getting your RoDTEP benefits from the Government.
Documents required for RoDTEP Scheme Application
The following documents have to be prepared before applying for the benefits under RoDTEP Scheme -
- Class 3 DSC
- Valid Icegate Registration with Login Id and password.
- Shipping bills
- Valid RCMC Copy
Note - Please note that E-brc is not mandatory for RoDTEP application, however, we advise all our clients to first obtain e-brc and then only apply for RoDTEP, in order to avoid any notices in the future, if any e-brc is not generated.
The last date of application for each shipping bill would be a maximum of 1 year from the Shipping Bill date or the scroll generation date whichever is later.
Rate of Rebate Under RoDTEP Scheme
- As per Notification No. 19/2015-2020, Dated 17th August 2021, the Government has announced the benefit rates for 8555 export products.
- All the eligible products with the benefit rates given under Appendix 4R notified on 17/08/2021 under notification number 19/2015-2020.
- Exporters will be given tax refunds in the range of 0.5 - 4.3 percent. The scheme would operate in a budgetary framework for each financial year and a 12,400 Cr outlay has been announced for the FY 2021-22 under RoDTEP Scheme.
Want to know the Benefit Rates under RoDTEP Scheme for your Export Product? Just fill the below form and our team will get back to you with the latest rates within 1 hour.
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How can we assist you to claim benefits under the RoDTEP scheme?
We are a team of highly motivated DGFT professionals providing DGFT services over the years. Our goal is to stay ahead of the curve by being on top of the news, comprehending new schemes and all the policies in them, realizing the benefits for exporters and importers, and turning the guidelines into a simple form that is easily understandable to our clients. At Afleo our experts perform the following task for you - Guidance would be provided about the declarations that have to be there in shipping bills to avail the maximum benefits under various export promotion schemes given in the new foreign trade policy.
Assistance in document preparation, we understand the importance of accurate documentation for fast processing.
- ICEGate registration and Digital signature preparation.
- Creation of RoDTEP Credit Ledger account.
- Application on ICEGate to avail the benefits under RoDTEP.
- Regular follow-up with Customs Icegate Portal for the license.
- We complete the entire process in a time-bound manner.
- We also guide in Sale/Purchase of RoDTEP Scrips and ensure you get the best value for your scrips.
FAQ’s
The RoDTEP (Remission of Duties or Taxes on Export Products) Scheme was approved by the Government of India on 13th March 2020 by replacing the MEIS Scheme. Under RoDTEP Scheme the exporters can get the refund of all hidden Central, State, and Local duties/taxes/levies on the goods exported which have not been refunded under any other existing scheme.
It is WTO compliant Scheme and follows the global principle that the taxes/duties should not be exported; they should be either exempted or remitted to exporters, to make the goods competitive in the global market.
Finance Minister Nirmala Sitharaman had announced the introduction of the RoDTEP Scheme on 1st February 2019 and it was approved by the Government on 13th March 2020.
The Scheme came into effect from1st January 2021.
As per appendix 4R the value cap per unit of the exported product has been notified and refund amount or rebate would be capped at such value provided on a per-unit basis.
| RoDTEP(Remission of Duties or Taxes on Export Products) | MEIS(Merchandise Exports from India Scheme) |
| Scheme for exporters to reimburse taxes and duties paid by them such as VAT, Mandi tax, electricity duties, and the fuel used for transportation etc. | (MEIS) is the additional export incentive scheme under which 2% - 5% of the FOB value of eligible export given as a reward to the exporters |
| Compliant with WTO norms | Incompliant with WTO norms |
There are 8555 tariff items that have been given under appendix 4R on which rebate is available, all the exporters of goods exporting these items are eligible to take benefit. Such exporter may either be the merchant or manufacturer exporter. .
No, RoDTEP and MEIS cannot be claimed simultaneously. The RoDTEP scheme replaced MEIS scheme completely.
The benefit under RoDTEP would be in the form of transferable duty credit scrip, or it
may be in the form of electronic scrip which will be maintained in the electronic ledger.
RoDTEP scheme will be applicable to all the sectors apart from the following -
Apparel and made-ups (Chapter 61, 62 & 63) for which the RoSCTL scheme has been extended for the benefits.
Steel, pharmaceuticals, organic and inorganic chemicals.
As per Notification No. 19/2015-2020, Dated 17th August 2021 the Government has announced the benefit rates for 8555 export products, given under Appendix 4R. Exporters will be given tax refunds in the range of 0.5 - 4.3 percent. The scheme would operate in a budgetary framework for each financial year and a 12,400 Cr outlay has been announced for the FY 2021-22 under RoDTEP Scheme.
The most common sectors such as steel, pharmaceuticals, organic and inorganic chemicals, etc are kept out from RoDTEP Scheme as they are doing well now without any incentive as per the Commerce secretary.
Yes, the scrips would be transferable to any other person having a valid IEC and valid ICEGATE Registration.
The RoDTEP benefits can be utilized in payment of Basic Customs Duty.
There are various industries that are not satisfied with the benefit rates notified under RoDTEP and who are kept out of the scheme, in such cases, the exporters can file the representations to the “RODTEP Policy Committee (RPC)” chaired by DGFT.
The broad procedure for claiming the benefit under the RODTEP scheme is provided below -
• To avail of the benefits under the RoDTEP scheme exporter has to make a claim for RoDTEP in the shipping bill by making a declaration.
• Once EGM is filed, a claim can be processed.
• Once processed a scroll with all individual Shipping Bills for admissible amount would be generated and made available in the user account at ICEGATE,
• The IEC holder who has registered on ICEGATE with the help of DSC can create a RoDTEP credit ledger account under the Credit Ledger tab.
• Exporter can log in to his account and can apply to get the RoDTEP scrip.
As the complete operational framework has not been notified by the Government, the exporters can perform the following steps before the procedure is made operational –
• ICEGate registration using Class 3 DSC.
• Create a RODTEP Credit ledger account.
There are two modules for the RoDTEP on ICEGate – 1) RODTEP Ledger Account creation 2) Scrip Management module.
There are the following option under the Scrip Management module –
• Scrip Generation
• Viewing Scrip details
• Transaction Details
• Scrip Transfer
• Approve Scrip Transfer Request
Yes, it will be, if the exporter is suspended for the drawback same will be applicable for the purpose of scrolling out of RoDTEP benefits. Thereby, unless the suspension is revoked, the claim cannot be made under RoDTEP.
There is No provision for remission of arrears or contingent liability is permitted under the scheme to be carried over to the next financial year.
The RoDTEP Scheme would operate in a budgetary framework for each financial year and a 12,400 Cr outlay has been announced for the FY 2021-22.
It is mandatory for the exporters to indicate in their Shipping Bill whether or not they intend to claim RoDTEP on the export items from 01/01/2021. Unlike Drawback, there will be no need to declare any separate code or schedule serial number for RoDTEP.
The exporter will have to make following declarations is the SW_INFO_TYPE Table of the Shipping Bill for each item:
Additionally, for every item where RODTEPY is claimed in INFO CODE, a declaration has to be submitted in the Statement Table of the Shipping Bill as below.
To enhance the ease of doing business the RoDTEP scheme would be implemented through digitization of the rebate amount in the form of transferable duty credit scrip. Such scrip would be maintained in an electronic ledger by the CBIC for its utilization.
The Appendix 4R of Handbook of Procedures, Notified by Department of Commerce under DGFT notification No. 19/2015-20 dated 17.08.2021 may be assessed to check the RoDTEP Rates. Please refer to this Link - https://www.dgft.gov.in/CP/?opt=RoDTEP
The benefit under the Scheme is available to all exporters irrespective of their status in respect of the goods manufactured in India. Further, there is no turnover limit criterion for claiming the benefit under the Scheme.
RoDTEP scheme is applicable to all the sectors apart from Apparel and made-ups (Chapters 61, 62 & 63) for which the RoSCTL scheme has been extended for the benefits.
No, Currently the benefit is not available to SEZ and EOU Units, as well as export under Advance License. However, As per para 4.55B of the FTP (inserted vide DGFT Notification No. 19/2015-20 dated 17.08.2021), the inclusion of the exporters under the categories of SEZ, EOU, Advance Authorisation etc. and the RoDTEP rates for export items under such categories would be decided later based on the recommendations of the RoDTEP Committee.
It is provided in DGFT Notification No. 19/ 2015-20 dated 17.08.2021, that the exporter would be required to keep records substantiating the claim made under the scheme. A monitoring and audit mechanism with an IT-based Risk Management System (RMS) would be put in place by the CBIC, Department of Revenue to physically verify the records of the exporters on a sample basis. Sample cases for physical verification will be drawn objectively by RMS, based on risk and other relevant parameters.
Latest Updates for RoDTEP Scheme
- Notification No. 70/2023 Dated. 08th March 2024: Extending RoDTEP support for exports made by Advance Authorisation (AA) holders, Export Oriented Units (EOU), Special Economic Zones (SEZ) units -Before the elections, the Government has made a significant decision regarding the RoDTEP scheme, which we will now discuss:
The RoDTEP scheme has now been extended to include Advance License Holders (excluding Deemed Exports) and 100% EOU units from 11.03.2014 to 30.09.2024.
The RoDTEP scheme has also been extended to SEZ units, with a tentative start date of 01.04.2024, subject to IT integration, which will also be applicable until 30.09.2024.
The validity of the normal RoDTEP scheme, which was originally until 30.06.2024, has now been extended until 30.09.2024.
The list of RoDTEP rates for normal exporters is provided in Appendix 4R, and for Advance, EOU & SEZ units, it is provided in Appendix 4RE. The general rate of benefit provided to AA holders, EOU & SEZ ranges from 0.3% to 0.8% for maximum products.
- 07th February 2023: Alignment of RoDTEP Schedule for Chapters 28, 29, 30 & 73 with First Schedule of the Customs Tariff Act, 1975: Consequent to the inclusion of export items from Chapter 28, 29, 30 & 73 vide Notification No. 47 dated 07.12.2022 under RoDTEP, Appendix 4R is aligned with First Schedule of the Customs Tariff Act, 1975 for implementation with effect from 15.02.2023
- 17th August 2021: Announcement of Scheme guidelines and benefit rates under RoDTEP scheme:
The Government has announced the benefit rates under RoDTEP scheme for 8555 export products. Exporters will be given tax refunds in the range of 0.5 - 4.3 percent on FOB value of exports with a Rs 12,400 crore outlay. - 1st January 2021: Implementation of RoDTEP Scheme from 1st Jan 2021 for all the export goods:
The Finance Ministry of India has extended the benefits under RoDTEP Scheme for all export goods from 1st January 2021, Department of Commerce would specify the RoDTEP rates, conditions, and exclusions under which benefits can be availed very soon. As per the Ministry, notified rates under RoDTEP Scheme irrespective of the date of notification, shall apply with effect from 1st January 2021 to all eligible exports of goods.
Exporters will have to declare intention of availing the scheme for each item in shipping bill or bill of export. - 13th March 2020: The Union Cabinet approved the RODTEP Scheme:
The Union Cabinet on Friday approved the Remission of Duties or Taxes on Export products, it will get into effect from January 2021 and will be until 2025 and will replace existing MEIS scheme in a phased manner. - 1st February 2020: Introduction of RODTEP by Finance Minister:
The Finance Minister in her Budget Speech on 1st February 2020 had announced that Scheme for Remission of duties and taxes on export products would be launched for which she allocated Rs 50,000 Crore.
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