The Indian government has recently reinstated incentives under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for exports conducted by entities holding Advance Authorization (AA) , Export-Oriented Units (EOUs) , and businesses operating in Special Economic Zones (SEZs) .
Understanding the RoDTEP Scheme
Launched on January 1, 2021 , following an amendment to the Foreign Trade Policy (2015–20), the RoDTEP scheme was introduced to reimburse exporters for embedded indirect taxes, duties, and levies incurred during production and distribution. These costs, which are not recoverable under other mechanisms, are absorbed into exported goods, making them less competitive internationally.
Key Objectives :
- Neutralize domestic taxes embedded in exported goods to align with WTO-compliant trade practices .
- Replace the earlier Merchandise Export Incentive Scheme (MEIS) , which faced challenges at the WTO over subsidy concerns.
- Boost India’s export volumes by reducing the financial burden on manufacturers and exporters.
Key Features of RoDTEP
- Tax Reimbursement : Covers unrefunded central, state, and local taxes incurred during manufacturing, including prior-stage indirect taxes.
- Digital Implementation : Managed through an end-to-end online platform by the Central Board of Indirect Taxes and Customs (CBIC) for transparency.
- Transferable Incentives : Refunds are issued as e-scrips (electronic credit certificates), which can offset customs duties on imports or be transferred to third parties.
- Refund Mechanism : Rebates are calculated as a percentage of the FOB (Free On Board) value of exports.
Eligibility Criteria
- Applies to all sectors exporting India-manufactured goods , regardless of turnover.
- Beneficiaries include merchant exporters , manufacturer exporters , SEZ units , EOUs , and e-commerce exporters .
- Priority Sectors : Labor-intensive industries previously supported under the MEIS receive preferential treatment.
- Exclusions : Re-exported goods (products imported and then exported without value addition) are ineligible.
Ineligible Exports
- Goods not originating from India.
- Products re-exported without undergoing substantial processing or manufacturing in India.
Frequently Asked Questions (FAQs)
Q1: Which goods qualify for RoDTEP benefits?
A: Over 8,555 tariff items classified under 8-digit Harmonized System (HS) codes are eligible.
Q2: Are re-exported goods covered under RoDTEP?
A: No, re-exported goods are explicitly excluded to ensure benefits apply only to domestically produced items.
