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Scheme guidelines for remission of duties and taxes on exported products

Ministry of Commerce and Industry has issued a Notification no. 19/2015-2020 dated 17th August, 2021 to provide the guidelines with respect to the new incentive scheme for export products viz. Remission of duties and taxes on exported products (‘RoDTEP Scheme’) as follows:

Scheme objectives and Features:

  1. The foremost objective is to refund all embedded duties and taxes on exported product (including prior stage cumulative indirect taxes) or on distribution of exported product used in the production at the central, state and local level.
  2. No rebate on duties and taxies already exempted, or remitted or credited under other scheme.
  3. Ceiling rate will be determined by a Committee in the department of revenue/Drawback division along with representations of the Doc/DGFT.
  4. Overall budget for the scheme would be finalized by the Ministry of finance.
  5. Scheme will operate in budgetary framework for each financial year and no provision for carried forward of arrears or contingent liabilities to next Financial year.
  6. Department of commerce will decide the sequence of introduction of the scheme across sector, prioritization of sector, degree of benefit etc.
  7. Rebate would be granted as a percentage of FOB value to eligible exporters and for certain products, benefit shall be granted as fixed amount per unit.
  8. Benefit shall be allowed only if export proceeds are realized within the time allowed under foreign exchange management act, 1999.
  9. Government to make rules and procedures on:
  • Manner of application
  • Time period for application
  • Export documentation
  • Recovery on non-realization of proceeds
  • Suspension or withholding of RoDTEP Scheme in case of frauds/misuse
  • Imposition of penalty and Interest
  1. Scheme will take affect from 1st Jan 2021 for exports except ineligible categories under para 4.55 (x), (xi), and (xii).

Ineligible supplies under the scheme:

  1. Below categories of export (Para 4.55) will not be eligible for rebate under RoDTEP Scheme:
  • Export of imported goods
  • Exports those are originating in third party but trans-shipped through India
  • Exports product subject to minimum export price or export duty
  • Products which are restricted for export under schedule -2 of export policy in ITC(HS)
  • Products which are prohibited for export under schedule -2 of export policy in ITC(HS)
  • Deemed exports
  • Supply of products manufactured by DTA units to SEZ/FTWZ units
  • Products manufactured in EHTP and BTP
  • Products manufactured in Customs bonded warehouse
  • Products manufactured or exported in lieu of export obligation against an advance authorization issued under a duty exemption scheme
  • Products manufactured or exported by a unit licensed as 100% export oriented unit
  • Products manufactured or exported by any of the units situated in Free trade zones
  • Products manufactured or exported availing the benefits of the notification no. 32/1997-customs dated 1st April 1997
  • Exports for which electronic documentation in ICEGATE EDI has not been generated
  • Exports from Non-EDI ports
  • Goods which have been taken into use after manufacture.
  1. Government has right to modify whether inclusion or exclusion any of the categories as mentioned above under scheme. It also provides that exports by EOU, FTZ/EPZ/SEZ unit and by Advance authorization may be subsequently included in RoDTEP Scheme and rates will be decided by RoDTEP Committee.

Procedure to claim benefit under the Scheme:

  1. Make declaration on Shipping bill: Exporters will be required to declare their intention to claim RoDTEP for each export item on Shipping Bill or Bill of Export. In case RoDTEP scheme is not selected in shipping bill, scheme would not accrue to exporter.

  2. Generation of credits in Electronic Credit Ledger: Based on exporter’s declaration in Shipping Bill, DGFT will process RoDTEP claim. Shipping Bill with RODTEPY declaration will be routed for officer intervention basis risk-based targeting by RMS. Accepted Shipping Bill will move to respective scrolls for disbursement of benefit. Option to generate RoDTEP scroll is currently disabled till Electronic Ledger module is enabled by CBIC. Once scroll is generated, benefit will be available as Credits in Electronic Ledger on ICEGATE portal.

  3. Convert credits into scrips: Exporter will be required to convert credits (generated through scrolls) into Scrips. Export can club multiple Shipping Bills for generating Scrips.

  4. Exporters can use such scrips only for payment of Basic Customs Duty
  5. Such Scrips are transferrable: Exporters can also transfer such e-scrips to any other entity having IEC and ICEGATE registration.

Monitoring, Audit and Risk Management System: Exporters would be required to maintain proper records substantiating claims made under the RoDTEP scheme. Government may physically verify such records on sample basis based on risk and other relevant parameters. Earlier the government halted the scheme for further clarification, now the guideline would help exporters to get the incentives in more viable manner.
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