GS Paper - 3 (Economy)

To boost exports, the government on 17 August 2021 announced rates of tax refunds under the export promotion scheme RoDTEP for 8,555 products, such as marine goods, yarn, dairy items. The government has set aside Rs 12,454 crore for refunds under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for the current fiscal.

What

  1. Under the RoDTEP, various central and state duties, taxes, and levies imposed on input products, among others, would be refunded to exporters.
  2. As the RoDTEP scheme came into effect from January 1 this year, additional funds will be provided at pro-rata basis for the period January to March.
  3. However three sectors of steel, chemicals and pharmaceuticals would not get the benefit of RoDTEP as they have "done well without" incentives.
  4. The reimbursement of taxes such as duty on power charges, VAT on fuel in transportation, farm sector, captive power generation, mandi tax, stamp duty and central excise duty on fuel used in transportation would make Indian products competitive in global markets.
  5. The tax refund rates range from 0.5 per cent to 4.3 per cent for various sectors.
  6. The rebate under the scheme would not be available in respect of duties and taxes already exempted or remitted or credited.
  7. RoDTEP support will be available to eligible exporters at a notified rate as a percentage of Freight On Board (FOB) value. Rebates on certain export products will also be subject to value cap per unit of the exported product.
  8. It will be implemented by Customs through a simplified IT System. Rebates will be issued in the form of a transferable duty credit/ electronic scrip (e-scrip) which will be maintained in an electronic ledger by the Central Board of Indirect Taxes and Customs (CBIC).
  9. According to the guidelines, certain categories which would not avail the benefits include export goods which are subject to minimum export price, restricted and prohibited items, deemed exports, supplies of goods manufactured by domestic tariff area units to SEZs, and products manufactured or exported by units situated in special economic zones.