August 18, 2021 1:08:23 am
IN A move aimed at boosting exports, the Commerce Ministry on Tuesday notified remission rates under the Rs 12,454-crore Remission of Duties and Taxes on Exported Products (RoDTEP) incentive scheme for 8,555 products, with rates ranging from 0.3 per cent to 4.3 per cent.
The scheme is aimed at refunding exporters, the duties, taxes, and levies paid by them at the Central, state, and local levels.
The RoDTEP scheme “roughly covers two-thirds, 65 per cent of the exports of the country,” said Commerce Secretary BVR Subrahmanyam, adding the rates would be reimbursed on the basis of a percentage value of the free on board (FoB) value of the items exported. He added there would, however, be “standard rates” for certain items, which would cap the remissions per unit to prevent any “fudging.”
Subrahmanyam noted that the RoDTEP scheme, in conjunction with RoSCTL (Rebate of State and Central Taxes and Levies) for garments and textiles, would cover about 95 per cent of product lines and a similar percentage of India’s total exports. He said the total provision for duty remissions under the two schemes was about Rs 19,400 crore.
He went on to add that the exports of certain products, including steel, pharmaceuticals and chemicals, would not be eligible to receive refunds under the scheme as they have “done very well for themselves” without incentives since RoDTEP was aimed at targeting exports where assistance was required.
The Secretary said the scheme was dynamic and would be reviewed regularly and might lead to some products being added or removed as required. He added additional funds would be made available for the two schemes over the Rs 19,400 crore available for FY21-22 on a pro rata basis for the first three months of this calendar year. The RoDTEP scheme replaces the MEIS (Merchandise Exports for India Scheme) incentive scheme for exporters that Subrahmanyam noted was “technically not legal” under WTO norms, adding the new scheme was compliant with WTO norms as it was designed with the goal that taxes borne by exporters should not be exported.
When asked about the smaller allocation to the new schemes, compared to MEIS that had a Budget allocation of Rs 39,097 crore for FY20, he said RoDTEP would perform much better than any other scheme in the past.
Subrahmanyam had said in an event last week that it was a matter of concern that the withdrawals from export schemes had tripled over the past five years, with exports remaining relatively constant. “RoDTEP scrips… are going to be tradable, transferable, can be used for payments on multiple fronts. So to that extent, a RoDTEP script is a cash in somebody’s pockets,” he said.
On the pending incentive payouts to exporters, under MEIS as well as SEIS for the service sector, Subrahmanyam said: “It is a pretty large amount…we are working very closely with the Finance Ministry… By the first week of September, we will come out with a solution to both the arrears of MEIS and SEIS.” He added pending payments would probably be staggered.
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