Remission of Duties and Taxes on Exported Products (RoDTEP) scheme
- Context: The Ministry of Commerce and Industry has announced a 50% cut in benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, effective immediately.
About RoDTEP Scheme
- The RoDTEP scheme was introduced in 2021 by the Ministry of Commerce and Industry to support Indian exporters.
Policy Change
- RoDTEP replaced the Merchandise Exports from India Scheme (MEIS).
- The earlier MEIS programme provided fixed export incentives, which were considered inconsistent with World Trade Organization (WTO) rules because they were viewed as trade-distorting subsidies.
Fundamental Principle
- The scheme is based on the global trade concept that taxes and duties should not be passed on to exports.
- In other words, exported goods should be free from domestic tax burdens so they can compete internationally at their actual production cost.
WTO-Compliant Framework
- Unlike MEIS, which functioned as a direct subsidy programme, RoDTEP follows a remission-based approach.
- It reimburses exporters for embedded taxes and levies using pre-determined average rates, ensuring compliance with WTO norms.
Dual Administrative Structure
- The Directorate General of Foreign Trade (DGFT), operating under the Ministry of Commerce and Industry, identifies eligible products and specifies the applicable rates.
- Meanwhile, the Department of Revenue under the Ministry of Finance handles the disbursement of refunds.
E-Scrip Mechanism
- Benefits are issued as transferable electronic scrips via the Indian Customs Electronic Gateway platform.
- Exporters may use these e-scrips to pay Basic Customs Duty or trade them in the open market.
