To boost exports, the government has announced rates of tax refunds under the export promotion scheme RoDTEP for 8,555 products that includes textile yarns and fabric. The government has set aside Rs 12,454 crore (approx. US$ 1.68 billion) for refunds under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for the current fiscal, a top official said. Under the RoDTEP, various central and state duties, taxes, and levies imposed on input products would be refunded to exporters.
Commerce Secretary B.V.R. Subrahmanyam said that Rs 19,400 crore (approx. US$ 2.6 billion) would be available for 2021-22 for both the RoDTEP and the Rebate of State and Central Taxes and Levies (RoSCTL). The RoSCTL scheme was announced for the export of garments and apparels.
For the RoDTEP scheme, the amount is Rs 12,454 crore and the remaining Rs 6,946 crore for RoSCTL. As the RoDTEP scheme came into effect from January 1 this year, additional funds will be provided at pro-rata basis for the period January to March.
“Today we have notified the rates. RoDTEP is going to be a long-lasting scheme and it is going to be a flagship scheme of the Commerce Ministry. It is also compliant to the World Trade Organisation,” the Secretary said. He added that both the schemes together would cover 95% of the tariff lines of goods exports.
The reimbursement of taxes such as duty on power charges, VAT on fuel in transportation, captive power generation, mandi tax, stamp duty and central excise duty on fuel used in transportation would make Indian products competitive in global markets, he said. The tax refund rates range from 0.5% to 4.3% for various sectors. The rebate under the scheme would not be available in respect of duties and taxes already exempted or remitted or credited.
RoDTEP support will be available to eligible exporters at a notified rate as a percentage of Free On Board (FOB) value. For textile sector, cotton yarn will get 3.8% RoDTEP with a cap of Rs.11.40 per kilo and woven fabric of 4.3% with a cap of Rs.3.4 per square meter. However, knitted fabric shall get 1% RoDTEP.
The scheme will be implemented by Customs through a simplified IT System. Rebates will be issued in the form of a transferable duty credit/electronic scrip (e-scrip) which will be maintained in an electronic ledger by the Central Board of Indirect Taxes and Customs (CBIC).
The Ministry also notified scheme guidelines for RoDTEP. According to the guidelines, certain categories which would not avail the benefits include export goods which are subject to minimum export price, restricted and prohibited items, deemed exports, supplies of goods manufactured by domestic tariff area units to SEZs, and products manufactured or exported by units situated in special economic zones.
‘RoDTEP Rates Will Increase Exports Of Cotton Textiles’
Manoj Kumar Patodia, Chairman, TEXPROCIL, in a statement welcomed the announcement of the much-awaited RoDTEP (Remission of Duties and Taxes on Export Products) rates for exports. He thanked Prime Minister Narendra Modi for his vision of including the entire textile value chain under the RoDTEP Scheme. “This will go a long way not only in ensuring the healthy development of the value chain, but also improve India’s competitiveness in overseas markets,” he said.