Centre notifies RoDTEP rates to boost exports, exporters to get Rs 19,400 cr in FY22 as duty refunds
New Delhi : The government on Tuesday announced the much-awaited tax refund rates under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme bringing cheers for exporters as it will ease their liquidity situation besides helping them price their products at competitive rates.
The reimbursement rate of taxes and duties on eligible export items vary from 0.01 per cent to 4.3 per cent of Free on Board (FOB) value.
Items such as gems & jewellery would have a refund rate of 0.01per cent whereas items such as shirt fabrics are at 4.3 per cent.
Sectors such as steel, pharma and chemicals are out of the RoDTEP scheme.
The Centre has provisioned Rs 19, 400 crore for duty remission during FY22.
Commerce Secretary BVR Subrahmanyam said that the Rs 19,400 is in a direct cash in the hands of the exporters.
While RoDTEP took effect from January 1, 2021 the tax refund rates had not been fixed. Under the scheme, the government would refund to exporters the embedded central, state and local taxes and levies thus helping the sector gain edge over rivals in the global market.
The refund would be credited in an exporter’s ledger account with Customs and used to pay Basic Customs duty on imported goods. The credits can also be transferred to other importers.
The export promotion scheme RoDTEP replaces the now defunct Merchandise Exports from India Scheme (MEIS) which had been found non-compliant with WTO norms. Rewards under MEIS were payable as a percentage (2,3 or 5 per cent) of realized Free on Board (FOB) value of covered exports by way of the MEIS duty credit scrip.
An exporter choosing to take the benefit of the RoDTEP would be required to declare his intention for each export item in the shipping bill or bill of export.
“We are happy because it provides predictability, stability and liquidity to exporters. Even if rates are low in some cases, they are based on the data furnished by the industry. So, what we are saying is that during the pandemic, industry also struggled to provide the data. If the industry can provide comprehensive and updated data, the Committee should look into increasing the rates if so warranted,” said Ajay Sahai, DG & CEO, Federation of Indian Export Organisations (FIEO).
With exports emerging as a powerful engine of growth on the back of strong demands from developed countries, the government plans to go the whole hog in seizing the opportunity.
It has set US$ 400 billion export target for FY22 and assured the industry of full policy support to achieve that. Prime Minister Narendra Modi recently unveiled a four-point strategy to boost exports in a meeting with Indian Missions abroad, top exporters, export promotion council chiefs and other stakeholders.
Announcing the bi-monthly Monetary Policy on August 6, Reserve Bank of India (RBI) Governor Shaktikanta Das said that strong external demand is an opportunity for India and further policy support should help in capitalising on this.
He, however, noted that global commodity prices and episodes of financial market volatility together with vulnerability to new waves of infections are downside risks to economic activity.
