Context The government is considering a proposal to allow producers in Special Economic Zones (SEZs) to sell their output to the domestic market without treating them as imports. It is also reviewing the exclusion of export-oriented units (EOUs) and SEZs from the recently notified tax refund scheme for exports.
The Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme was announced in 2019 by the Government of India and it became effective on 1 January 2021.
It allows exporters to receive refunds on taxes and duties that are not exempted or refunded under any other scheme.
Aim: To boost the export of goods that were poor in volume.
It replaces the Merchandise Export from India Scheme (MEIS).
It is a combination of the MEIS and the Rebate of State and Central Taxes and Levies (RoSCTL).
Under this scheme, refund would be claimed as a percentage of the Freight On Board (FOB) value of exports.
What are Special Economic Zones (SEZ)?
It is a specifically delineated duty-free enclave, deemed to be foreign territory for the purposes of trade operations and duties and tariffs.
Goods and services going into the SEZ area from Domestic Tariff Area (whole India except SEZ) shall be treated as exports and goods coming from the SEZ area into DTA shall be treated as imports.
SEZ units may be set up for manufacture of goods and rendering of services.
The business and trade laws are different from the rest of the country.
SEZs are located within a country’s national borders.
Their aims include increasing trade balance, employment, increased investment, job creation and effective administration
The present rule governing SEZ units is that SEZ units may import/procure goods and services from DTA without payment of import duty. But when SEZs are selling goods into DTA then Import/Customs Duty is imposed.
