Interaction on RoDTEP Scheme
FIEO/EP.2(2)/2020-2021 January 8, 2021
FIEO organized an Interactive Session for exporters on January 7, 2021 on the RoDTEP Scheme which was attended by more than 1500 participants. During the Session, the undersigned informed that Ministry of Finance through a Press Note released on 31st December, 2020 made operational the Scheme from 1st of January, 2021 though the legal framework and rates are still to be announced.
The RoDTEP Scheme has been announced without rates putting all the exporters in precarious situation in negotiation and finalization of new export orders. We hope that Notifications notifying the rates and guidelines will be issued shortly by DGFT and CBIC to give it legal frame work also. The only concern is that RoDTEP being duty rebate scheme should not be limited by Budget constraints since both coverage and rates are dependent on the same. If the Scheme covers reimbursement of duties, it should not be limited by the Budget.
Several issues/queries received from members have already been flagged - Policy issues to FM and CIM and operational issues to Chairman, CBIC. I made a presentation on the Scheme which is attached (CLICK HERE) for members’ reference.
Gist of responses on various queries raised by the participants is given below:
- FIEO has already requested the Authorities for immediate announcement of the RoDTEP rates for all the product so as to remove uncertainty and help the trade to factor such rates while negotiating or executing new orders. All rates to be notified by 31st January, 2021.
- Request has also been made to notify the rates at 4/6 digits so as to reduce the fixation work and provide flexibility to exporters.
- RoDTEP scheme at present doesn’t cover exports by AA, EOU, SEZ etc. FIEO has made request to the Authorities to provide RoDTEP benefit to Advance Authorization Holders, DFIA, ARO, EOUs, SEZs as they also suffer embedded taxes on domestic procurement and also incur taxes on fuel both for inward and outward transportation.
- A request has also been made for Transitional Mechanism to cover those cases where shipping bills were filed before 31st of December, 2020 but LEO issued on or after 1st January, 2021 without the need of declaration of RoDTEP or the Code RODTEP
- No separate Code or Serial Number needed. RITC code given in the shipping bill will suffice.
- Declaration is required to be given in Shipping Bill to claim RoDTEP. Further, for every item where RODTEPY is claimed in INFO CODE, a declaration has to be submitted in the Statement Table of the Shipping Bill.
- RoDTEP benefit is available for S/Bs with LEO date of 01.01.2021. If LEO date is till 31.12.2020, MEIS will be applicable, if product is covered under it.
- No separate Application is required to be made for claiming RoDTEP benefit. Once the rates are notified, S/Bs will appear in the Ledger created at ICEGATE with Scroll No. and Date and the entitlement. Exporters can choose the S/B for which he wants to generate the Scrip provided the exporter has declared the intent to claim RoDTEP.
- Since Drawback is not refunding the duties and taxes refunded by RoDTEP, therefore, exporter is eligible to claim both.
- Currently, adhoc rate is being reflected in RoDTEP amount column so that S/B can flow. However, the actual rates, when notified will be applicable as per eligibility and the same will be visible in scroll under the Ledger at ICEGATE.
- There is no timeline for registration at ICEGATE. However, it is advised to get registered and create ledger as rates once notified, the shipping bill with scroll details and entitlement will appear in the ledger only.
- RoSCTL is now replaced by RoDTEP. Drawback and IGST refund will still be available.
- If the system is not taking RoDTEP declaration where MEIS was not available, FIEO will flag the issue with the department.
- Currently, as per the understanding RoDTEP credit may be available without submission of e-BRC in similar way as in the case of Duty Drawback. But exporter will have to realise the proceeds and methodology in this regard will be known once notification /guidelines are issued.
- RoDTEP will be in scrip form and completely in electronic mode, which can be used for payment of import duties. It can be transferred for the same purpose.
- Imports for exports, in the same form and without any value addition may not be eligible for RoDTEP.
- Exports under EPCG will be applicable for RoDTEP scheme.
- Currently, RoDTEP scheme is applicable only for exports of goods. For services exports, SEIS benefit is in existence which may be continued in modified form.
- FIEO has made a request for availability of RoDTEP through transitional arrangement in cases where S/Bs were filed before 01.01.2021 but the LEO is after 01.01.2021.
- As in the case of exports to Iran during the period of US sanctions, MEIS was applicable even when payments’ being realised in INR. Similarly, RoDTEP benefit may also be applicable as Iran is treated as an exception.
- With the starting of RoDTEP Scheme, no changes in documentation are required only intent to claim RoDTEP is to be provided while filing the S/B.
- Freight charges not to be accounted under the RoDTEP calculation, only duties and taxes are covered under the RoDTEP.
- It is advised that if the option of claiming RoDTEP is available to SEZs while filing the S/B the same may be claimed, as this will help as and when RoDTEP may get extended to SEZs.
- In export transactions, where the buyer is realizing payment in INR through NOSTRO/VOSTRO account while exporting to UK, USA, UAE etc. are eligible for foreign trade policy benefits as the realization is counted towards FOREX.
With kind regards,
Dr. Ajay Sahai
DG & CEO