Exporters call for enhanced benefits and expansion of RoDTEP Scheme

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Exporters call for enhanced benefits and expansion of RoDTEP Scheme

Exporters call for enhanced benefits and expansion of RoDTEP Scheme

Industry News
Sep 29,23

Exporters are urging the government to enhance benefits for value-added goods under the flagship Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. Currently, the scheme offers higher refund rates for goods with lower value addition, contradicting the government's objective of promoting exports with higher value addition.

The Federation of Indian Export Organisations (FIEO), representing exporters, highlights disparities in refund rates. For instance, while aluminum bars and rods receive a RoDTEP refund rate of 2.2%, their value-added counterparts only get 1.2%. FIEO has submitted a request to the commerce department, urging the inclusion of additional criteria to adequately reward value-added exports. The FIEO emphasises that in some cases, products with a 100% value addition receive lower RoDTEP entitlement compared to products with lesser value addition.

The RoDTEP scheme aims to refund non-creditable central, state, and local levies incurred by exporters during the manufacturing and distribution of exported products. It was implemented on January 1, 2021, replacing the controversial Merchandise Exports from India Scheme (MEIS) following a World Trade Organisation (WTO) ruling against MEIS's export subsidies.

FIEO emphasises that the RoDTEP scheme, which neutralises duties similar to duty drawback, should have no end date. This scheme, along with duty drawback, duty exemption, and goods and services tax refund mechanisms, ensures zero-rating for Indian exports and aligns with WTO regulations under the Agreement on Subsidy and Countervailing Measures (ASCM).

Additionally, exporters are advocating for the RoDTEP scheme's extension to all export sectors, including export-oriented units, special economic zones, and entities with unrebated tax incidences.