Centre Notifies RoDTEP Scheme Guidelines and Rates
Part of: GS Prelims and Mains GS-III- Economy
In news: Centre has recently notified RoDTEP Scheme Guidelines and Rates (Remission of Duties and Taxes on Exported Products).
- The rates of RoDTEP will cover 8555 tariff lines.
About Remission of Duties and Taxes on Exported Products (RoDTEP):
- The RoDTEP scheme was announced by Union Government in 2019 to boost exports by allowing reimbursement of taxes and duties, which are not exempted or refunded under any other scheme.
- At present, embedded duties and taxes, which are not refunded under any other scheme, range from 1-3%.
- Under the scheme, rebate of these taxes will be given in the form of duty credit/electronic scrip.
- It is a reform based on the globally accepted principle that taxes and duties should not be exported, and taxes and levies borne on the exported products should be either exempted or remitted to exporters.
- The scheme is in accordance with World Trade Organization (WTO) norms.
- It is a combination of the current Merchandise Export from India Scheme (MEIS) and Rebate of State and Central Taxes and Levies (RoSCTL).
- MEIS: It’s a scheme where incentives or rewards are given to exporters to offset infrastructural inefficiencies with the objective to promote manufacture and export of notified products
- RoSCTL: The scheme was notified by textile ministry to rebate the incidence of various state and central tax levied on export of garments.
Significance of the RoDTEP scheme:
- RoDTEP support will be available to eligible exporters at a notified rate as a percentage of Freight on Board (FOB) value. Rebate on certain export products will also be subject to value cap per unit of the exported product.
- Sectors like Marine, Agriculture, Leather, Gems & Jewellery, Automobile, Plastics, Electrical / Electronics, Machinery get the benefits of Scheme.
- In the existing schemes, certain taxes, such as state taxes on power, oil, water and education cess, are not included. Under RoDTEP, such taxes are also proposed to be included in the indicative list making the scheme exhaustive.
- Therefore, it is a reform where Government is trying to support domestic industry and make it more competitive in the international markets.
News Source: PIB