Govt extends benefits of tax refund scheme to all export goods from today
The government has decided to extend the benefits of the Remission of Duties and Taxes on Exported Products (RoDTEP) to all export goods starting January 1, 2021. The rates under this scheme, which are expected to be notified “shortly”, will be applicable from this date to all eligible exports of goods “irrespective of the date of notification”, stated the Ministry of Finance in a release about the development on Thursday.
According to the government, the decision to extend the benefits of the scheme to all export goods would be a “major step” to boost exports. Initially, the scheme was expected to be limited to around three sectors to start with due to limited resources.
“The RoDTEP rates would be notified shortly by the Department of Commerce, based on the recommendation of a Committee chaired by Dr. G.K. Pillai, former Commerce and Home Secretary. The final Report of the Committee is expected shortly,” stated the finance ministry in its release.
These rates were not notified by press time Thursday.
“An exporter desirous of availing the benefit of the RoDTEP scheme shall be required to declare his intention for each export item in the shipping bill or bill of export. The RoDTEP shall be allowed, subject to specified conditions and exclusions,” stated the Ministry.
The scheme was announced last year as a replacement for the Merchandise Export from India Scheme (MEIS), which was not found not to be compliant with the rules of the World Trade Organisation. Following a complaint by the US, a dispute settlement panel had ruled against India’s use of MEIS as it had found the duty credit scrips awarded under the scheme to be inconsistent with WTO norms.
The RoDTEP scheme would refund to exporters the embedded central, state and local duties or taxes that were so far not being rebated or refunded and were, therefore, placing India’s exports at a disadvantage, according to the Finance Ministry. The refund would be credited in an exporter’s ledger account with Customs and used to pay Basic Customs duty on imported goods. These credits can also be transferred to other importers, according to the ministry.
Some industry executives expect the notification of the rates to be delayed due to a resource crunch.