Govt notifies processes for granting RODTEP duty credits
The Finance Ministry has notified the Electronic Duty Credit Ledger Regulations, 2021 and the processes for grant as well as suspension and cancellation of duty credits against goods exported under Remission of Duties and Taxes on Exported Products (RODTEP) scheme. A circular has been issued clarifying the processes.
The Commerce Ministry had notified the scheme and the RODTEP rates five weeks earlier. In January this year, the Customs electronic portal had issued an advisory and step by step guide for the users to create a RODTEP credit ledger account, generate e-scrips and transfer the e-scrips to any other holder of Importer Exporter Code (IEC).
Any IEC holder registered with the Customs can create his own electronic credit ledger in the Customs automated system. An exporter must make a claim for RODTEP in the shipping bill or bill of export by making the prescribed declaration. Once export manifest or export report is filed, the claim will be processed by Customs based on the notified RODTEP rates and value caps applied on the FOB value of exports or 1.5 times the market price of the goods, whichever is less.
A scroll with all individual shipping bills for the admissible amount would be generated and made available in the user’s account at the Customs electronic portal. An exporter can log in into his account and generate an e-scrip by selecting the relevant shipping bills. He can combine the duty credits allowed to him in one or more shipping bills and create an e-scrip in the ledger, customs stationwise according to the customs station of export, within a period of one year from the date of generation of the scroll in the customs automated system. If he does not do so, duty credit in each scroll will be combined customs station-wise and will be automatically created by the customs automated system as a single e-scrip for each customs station, in the ledger of the exporter.
Each e-scrip will have a unique identification number and date of its creation and all transactions in the ledger must be carried out using that number and date. The e-scrip can be transferred in full electronically from the ledger of one person to the electronic ledger of any IEC holder. The e-scrip will be valid for one year from the date of its creation. The duty credit available in the e-scrip in the ledger can be utilised for payment of basic customs duty.
Where a person contravenes any provisions of any law in relation to the exports to which the duty credit relates, or in relation to the e-scrip, the related duty credit or e-scrip may be suspended or cancelled in the ledger. Unlike the earlier duty credit schemes, the RODTEP credits will be given immediately after export without waiting for export proceeds to be realized.
However, if the exporter fails to realize full or part of the export proceeds, he must pay an amount equal to the RODTEP credit received for the unrealized value.the electronic duty credit ledger system is far more efficient and cost effective than the earlier system of grant, transfer and utilization of duty credits, although giving cash instead of duty credit would have made a lot more sense. Still, the Commerce and Finance Ministries deserve appreciation for implementing the electronic credit ledger system.