The main objective of RoDTEP is to refund the duties and taxes that are not rebated or exempted through schemes for duty drawback, advance authorisation, EOU etc
The New Year started with lots of confusion for the exporters. The previous night, a government press note announced implementation of the Refund of Duties and Taxes on Export Product (RoDTEP) scheme with effect from 1st January 2021. Later, the exporters found an advisory in the icegate.gov.in portal detailing how the scheme will be implemented. It said the exporters must file a prescribed declaration claiming RoDTEP duty credits and that the system will not allow filing such a declaration for exports in discharge of export obligation against advance authorisation, by export oriented units (EOU) etc. The exporters found that the electronic system does not allow filing the RoDTEP declaration not only for shipment by EOU and under duty exemption scheme but also under Export Promotion Capital Goods (EPCG) scheme.
The main objective of RoDTEP is to refund the duties and taxes that are not rebated or exempted through schemes for duty drawback, advance authorisation, EOU etc. that allow duty free import of inputs required for export production. So, the exporters found it difficult to understand why the RoDTEP benefit was not allowed for exports made under the duty exemption scheme, EOU scheme or even the EPCG scheme etc.
Possibly, the Finance Ministry is of the view that since import of fuel is allowed as an input under duty exemption, EOU scheme etc., there is no need to give RoDTEP benefit for shipments under those schemes. But, this facility is availed of only by a few exporters. Also, the RoDTEP intends to rebate several other types of embedded duties and taxes such as on transportation fuel, captive power, mandi tax, electricity duty, stamp duty on documents, SGST levied on inputs for production of (raw) cotton like fertilisers, pesticides, etc., any kind of purchases from unregistered dealers, inputs needed for the transport sector, coal used in the production of electricity etc. So, the denial of RoDTEP benefit for shipments under the schemes that allow duty free inputs for export productions seems unjustified.
The Commerce Ministry, mandated by law to formulate and notify or amend the Foreign Trade Policy has not yet notified the RoDTEP scheme. The RoDTEP rates are not yet notified. For fixation of the rates, the government had called for data from the trade in a very complex form that few have submitted. The rates will be notified with retrospective effective from January 1, 2021.
A remarkable feature of the scheme is that it will be administered through an electronic RoDTEP credit ledger maintained at the icegate.gov.in portal where credit, debit and transfer can be made. The credits will be made available after exports and can be utilised for paying basic customs duty on imported goods. Section 51B of the Customs Act, 1962 provides the legal framework for maintaining duty credit in the customs automated system in the form of an electronic duty credit ledger. No notification has been issued under the said provision or under Section 157 of the said Act that empowers the government to prescribe the manner in which the electronic duty credit ledger shall be maintained.
The exporters are agitated that the government waited till the last moment and then introduced a flawed scheme without waiting for the RoDTEP rates to be notified but hope the government will soon take remedial measures.
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