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Indirect Tax Alert - DGFT: Scheme Guidelines for Remission of Duties and Taxes on Exported Products (RoDTEP) and Rates of Rebate/ Value Cap per unit under the Scheme

18 August 2021

1. Scheme Objective and Operating Principles

  • To refund, currently unrefunded, duties/taxes/levies borne on exported product:
    • At the Central, State, and local level including prior stage cumulative indirect taxes on goods and services used in the production and
    • In respect of distribution of exported product.
  • No rebate in respect of duties and taxes already exempted or remitted or credited.
  • Determination of ceiling rates to be done by Committee in the Department of Revenue(‘DoR’)/Drawback Division with suitable representation of the Department of Commerce (‘DoC’)/DGFT, line Ministries and experts, on the prioritized sectors.
  • Overall budget/outlay for the RoDTEP Scheme would be finalized by the Ministry of Finance (‘MoF’) in consultation with DoC.
  • Scheme will operate in a Budgetary framework for each Financial Year and necessary calibrations and revisions shall be made, as and when required.
  • No provision for remission of arrears or contingent liabilities is permissible to be carried over to the next Financial Year
  • Sequence of introduction of the Scheme across sectors, prioritisation, degree of benefits/ceiling, on the per item/total overall benefit amount permissible, within the overall budget/outlay finalized, will be decided by the DoC in consultation with DoR.
  • Rebate would be granted to eligible exporters at a notified rate.
  • For certain items, a fixed quantum of rebate amount per unit may also be notified.
  • Rates of rebate/value cap per unit under RoDTEP will be notified in Appendix 4R.
  • Rebate allowed is subject to the receipt of sale proceeds within the time allowed under the Foreign Exchange Management Act, 1999.
  • Scheme would be implemented through end-to-end digitisation of issuance of rebate amount in the form of transferable duty credit/electronic scrip (e-scrip).
  • Central Board of Indirect Taxes and Customs (CBIC) and DoR on an IT enabled platform with a view of end-to-end digitization would notify rules and procedures regarding grant of claim and implementation, manner of application, time period for application and other matters including export realization, export documentation, sampling procedures, record keeping, etc.
  • Provisions for recovery of rebate amount where foreign exchange is not realized, suspension/withholding of RoDTEP in case of frauds and misuse, as well as imposition of penalty will also be built by CBIC.
  • The Scheme will take effect for exports from 01 January 2021.
  • Implementation date for exports under Para 4.55 (x), (xi) and (xii) of FTP (Para 2 below) will be decided later.

2. Ineligible Supplies/Items/Categories for rebate under the Scheme

  • Export of imported goods covered under Para 2.46 of FTP
  • Exports through trans-shipment
  • Export products which are subject to Minimum export price or export duty
  • Products restricted for exports under Schedule-2 of Export Policy in ITC (HS)
  • Products prohibited for exports under Schedule-2 of Export Policy in ITC (HS)
  • Deemed Exports
  • Supplies of products manufactured by DTA units to SEZ/FTWZ units
  • Products manufactured in EHTP and BTP
  • Products manufactured in a warehouse under Section 65 of Customs Act, 1962
  • Products manufactured or exported in discharge of export obligation against an Advance Authorization or Duty-Free Import Authorization, or Special Advance Authorization issued under a Duty Exemption Scheme
  • Products manufactured or exported by a unit licensed as 100% EOU
  • Products manufactured or exported by units situated in FTWZ or EPZ or SEZ
  • Products manufactured or exported availing benefit of the notification no:32/1997-Customs dated 01 April 1997
  • Exports for which electronic documentation in ICEGATE EDI has not been generated/ Exports from non-EDI ports
  • Goods taken into use after manufacture.

3. Government reserved the right to modify any categories for inclusion or exclusion under the scope of RoDTEP Scheme.

4. Inclusion of exports made and RoDTEP rates under categories in para 4.55 (x), (xi) and (xii) of FTP (Para 2 above) would be decided based on the recommendations of the RoDTEP Committee.

5. The e-scrips would be used only for payment of Basic Customs Duty leviable under the First Schedule to the Customs Tariff Act, 1975.

6. A monitoring and audit mechanism with an IT based Risk Management System (RMS) would be put in place by the CBIC, DoR to physically verify the records of the exporters on sample basis.

7. For a broad level monitoring, an Output Outcome framework will be maintained and monitored at regular intervals.

8. Residual issues related to the Scheme arising subsequently shall be considered by RODTEP Policy Committee (RPC) chaired by DGFT, whose decisions would be binding.

9. The Appendix-4R containing the eligible RoDTEP export items, rates and per unit value caps, wherever applicable is available at the DGFT portal under Regulatory Updates > RoDTEP.

[Notification no:19/2015-20 dated 17 August 2021]