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written by | April 28, 2022

What Is the RoDTEP Scheme and How Is It Beneficial?

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RoDTEP stands for " Remission of Duties and Taxes on Exported Products” Scheme. So it is concerned with the duties and taxes on export products. It is an exporter benefit scheme, which went into effect on January 1, 2021. RoDTEP replaced the MEIS scheme. The scheme guarantees that Indian exporters get refunds for taxes and duties paid. This scheme is designed to encourage export and provide incentives for the exporters.

RoDTEP and MEIS are both schemes that encourage exports to India by lowering export duties. Indian exporters can get between 2% to 7% of the free-on-board value. The Ministry of Finance informed us that the rewards would be greater than the MEIS scheme, and the country's products will determine the rate of reward. Let's learn in detail about the RoDTEP scheme.

Did You Know?

RoDTEP means remission of duties & taxes on exported products. This new scheme is effective as of January 1, 2021. It replaced the MEIS scheme challenged at the WTO by the US and was ruled in India's favour by a WTO dispute panel. This scheme was created to increase the exports of low-quality commodities.

Features of the RoDTEP Scheme

  • A fully automated credit system. Reimbursements are made in electronic scripts, which are transferable. These duty credits will be kept and tracked by a computerised ledger.
  • Duties and taxes previously non-refundable will be refunded. This scheme will reimburse mandi, VAT, coal cess and Central Excise tax on fuel. RoDTEP Scheme currently covers all goods under the MEIS (Rebate of State, Central Taxes and Levies)
  • To ensure consistency, RoDTEP is a multi-sectoral program. It covers all industries, even textiles. A committee will also be established to decide how the program will be implemented across multiple industries, the extent of each industry's benefit and other pertinent issues.
  • Digitisation makes it easy to verify documents quickly. Exporters' records will be checked using an IT-based risk management software to ensure speedy and accurate transaction processing.

Also Read: Know About Merchandise Exports From India Scheme (MEIS)

Eligibility Criteria to Apply for the RoDTEP Scheme

Every exporter must meet certain eligibility requirements to be eligible for the RoDTEP scheme.

  • This scheme is also available for goods exported by courier via e-commerce platforms.
  • This scheme is open to both manufacturer and merchant exporters.
  • Exports of goods and products must be made in India. No products from other countries are allowed.

RoDTEP Scheme Benefits

The ICEGATE entry will provide insight into the credit benefits enjoyed by the exporter. The exporter must show the port the RoDTEP benefit for a particular fare item. Using these credit scrips to pay traditional obligations or guarantee refunds is possible. They also allow for the transfer of funds to other shippers.

The following is the cycle for ageing and asserting scrips under RoDTEP:

  • The customs will handle the case once the Export General Manifest (EGM) has been documented.
  • Exporters should assert RoDTEP in their transportation bills.
  • After the case is handled, a detailed look will be made with all Shipping Bills. This information will then be available in the client's account on the ICEGATE gateway.
  • After establishing the RoDTEP credit account, exporters can log in to their records and select the transportation bills they wish to create scrips.
  • Exporters should log in to the ICEGATE entryway and create a RoDTEP credit record.
  • Once the scripts have been produced, the discount will automatically be credited to the exporter's account. It will then be available for use during an instalment of qualified obligations, imports, or for a move towards another shipper.

The Government of India has not yet provided any guidance on reducing RoDTEP scheme rates necessarily for items under the RoDTEP scheme

Concerns Regarding the RoDTEP Scheme 

  • Both merchant exporters (traders) and manufacturer exporters (traders) can enjoy the benefits of this plan.
  • RoDTEP scheme could be beneficial to all industries, even the textile industry. The MEIS Scheme will highly benefit labour-intensive industries.
  • There is no minimum turnover necessary to be eligible for RoDTEP.
  • To be eligible for the scheme's benefits, exports must come from India.
  • This does not apply to reexported products.

How Do I Apply Online for the RoDTEP Scheme?

The RoDTEP application process is similar to the Rebate Of State & Central Taxes and Levies.

To apply for the RoDTEP scheme, you can follow these steps:

  1. Log on to ICEGATE (icegate.gov.in).
  2. Use a Class 3 Individual Type Digital Signature Certificate to file your application.
  3. Attach the following documents and link them with the application

RoDTEP Application Form

  • Electronic Bank Realisation Certificate (eBRC).
  • Shipping Bills
  • Registration Cum Membership Certificate (RCMC)
  • Digital Signature Certificate (DSC), Class 3

RoDTEP Scheme

This is a step-by-step guide on how the RoDTEP scheme operates:

1. Create the RoDTEP credit ledger

First, exporters must create an electronic credit account using the ICEGATE portal (www.icegate.gov.in). You can use the Class 3 Digital Signature Certificates (DSC) to access the RoDTEP benefits. If an exporter is logging in for the first time to the portal, they will need to register and log in with the credentials.

After logging on successfully, the user can choose the "RoDTEP" option from the drop-down menu to create a credit ledger.

This service allows you to access the following information:

  • Scroll details
  • Scrip details
  • Transaction details
  • Transfer scrips
  • Approved scrips

2. Shipping bills - declaration

Exporters who wish to claim RoDTEP benefits must declare RoDTEP on their shipping bills and RoDTEP if they do not want to use the benefits. The exporter will not be reimbursed if the shipping bill doesn't include these details.

3. Claim processing & scroll generation

After the carrier has filed the Export General Manifest, the shipping bills will be profiled by RMS. They are sent either to an officer for intervention or directly to the appropriate scroll queues. The amount can be accessed on the ICEGATE portal in credits once the scrolls have been generated.

4. Creating and using scrips

Exporters can convert credit scrips from the credits in the portal into credit scrips. Each user receives a unique Scrip ID. Every time a script is created, entries are made to the credit ledger.

Also Read: SME – Learn About Its Meaning and Full Form, Concept, and Significance

RoDTEP vs MEIS

MEIS

RoDTEP

1. Accessible on the fare to products: Impetuses

1. Discount on obligations and charges not currently being repaid through other schemes

2. This is not consistent with WTO standards.

2. In accordance with the WTO standards.

3. The FOB (Free On Board) value of all fares is 2% to 5%

3. The item-based % is not yet determined

4. As adaptable scrips.

4. As an adaptable obligation credit, or electronic scripts that can be kept up to date through an electronic record.

Conclusion

RoDTEP was created to replace the merchandise exports from India scheme (MEIS). The previous scheme was not in compliance with WTO's standards. This scheme aims to provide incentives for small exporters through duty scrips. Exporters will receive greater insurance coverage, lower interest rates on capital loans and financial incentives for exports. 

Exporting business relies on the calculation a lot. Therefore, you must keep all debit and credit calculations on point.
Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: What are the RoDTEP scheme rates?

Ans:

The central government notified the RoDTEP scheme rates and guidelines on 17 August 2021. The notified rates under the scheme for various sectors are 0.5%-1.4%, 2.4%, and 4%. The government has yet to announce a specific rebate per unit for some export items.

Q: Does RoDTEP cover services?

Ans:

The scheme supports services. Exports while focusing on problems like employment generation. It looks into the requirements of specific sectors,  removes the burden of un-refunded taxes, supports small businesses, and levies on the lines of the remission of the RoDTEP scheme for merchandise exports.

Q: Who is eligible for the scheme?

Ans:

Merchant exporters and Manufacturer exporters are both eligible for the RoDTEP scheme. You don't need a definite turnover threshold to claim this scheme.

Q: What are the RoDTEP scheme benefits?

Ans:

Mandi tax, central excise duty on fuel, VAT, coal cess, etc., will now be refunded under the RoDTEP scheme. The items under the RoSTCL (Rebate of State and Central Taxes and Levies) and MEIS are now under the RoDTEP scheme's purview.

Q: What is the RoDTEP scheme?

Ans:

Under the RoDTEP scheme, exporters will benefit from 0.5% to 4.3% of the exported products' FOB value. This applies to only those products which fall under the specified HS codes.

Q: What is the RoDTEP?

Ans:

RoDTEP stands for "Remission of Duties and Taxes on Exported Products". It is a new scheme applicable from 1st January 2021, and it replaces the existing Merchandise Exports from India Scheme.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.