Govt announces ~12,454-cr outlay for tax refund of 8,555 export items
The central government on Tuesday announced the much-awaited guidelines and tax refund rates for the export boosting scheme Remission of Duties and Taxes on Export Products (RODTEP), which will cover 8,555 items.
The set aside an outlay of ~12,454 crore for the scheme in the current fiscal, with the refund rates ranging between 0.5 per cent and 4.3 per cent.
The scheme was notified on January 1 and replaced the Merchandise Exports from India Scheme (MEIS) after the World Trade Organization (WTO) ruled that it violated provisions by providing export subsidies for a wide range of goods. RODTEP aims to refund exporters the embedded non-creditable central, state and local levies paid on inputs. These taxes were not being refunded earlier. Though the refund rates have been announced eight months after the scheme was notified, the government said the benefits will kick in from January 1, 2021. The department of commerce and the finance ministry are working out the outgo for the January-march 2020-21 period, which officials said will be calculated on a pro-rata basis.
Commerce Secretary BVR Subrahmanyam said the scheme is W to compliant and will not face any international dispute. He added that including the Rebate of State and Central Taxes and Levies (ROSCTL), a similar scheme for garments and made-ups, the total outgo from the Centre will be ~19,400 crore. “At a time when the country is trying to come out of the pandemic, Atmanirbharta (self-sufficiency) is the priority of the government. This is money being directly put into the pockets of exporters. A couple of more backlogs will also be cleared in the next few weeks,” Subrahmanyam told reporters, adding that the government will soon clear arrears from three key schemes — the Target Plus Scheme, Services Export from India Scheme (SEIS), and MEIS.
Notifying the RODTEP rates is expected to come as a huge relief for exporters and remove uncertainty thereby allowing traders to forge new contracts with the foreign buyers. “The rates will help ease the liquidity of exporters, ensuring predictability and stability, thus, helping competitiveness of exports over a long time horizon. The RODTEP coupled with GST refund and Duty Drawback ensure that our exports do not contain any incidence of taxes and duties,” said A Sakthivel, president of the Federation of Indian Export Organisations.
A statement said RODTEP will boost Indian exports by providing a level playing field to domestic industry abroad.