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RoDTEP Applicable With Effect From 01 January 2021

Remission of Duties and Taxes on Exported Products (RoDTEP) is a new scheme to replace the existing scheme called MEIS scheme for exports of goods from India, which targets to reimburse the taxes & duties incurred by exporters used for transportation, which are not getting exempted/refunded under any other existing scheme. The rebate would be claimed as a percentage of the FOB (Freight On Board) value of exports.

As we all are aware that the Government was in discussion for the introduction of a new benefit of ​​ RoDTEP on merchandise exports replacing the existing ​​Merchandise Exports from India Scheme (MEIS) Scheme. In relation to the same, the Ministry of Finance has recently issued a ​​Press Release on 31/12/2020 to give a quick start to the new scheme ​​from 01/01/202​1.

Important Points from Press Release:-

– Benefit of RoDTEP extended to all export goods w.e.f. 01/01/ 2021 (The notified ​​rates, irrespective of the date of notification, shall apply w.e.f. 01/01/ 2021 to all eligible exports of goods);- The RoDTEP scheme would ​​refund to exporters the embedded taxes/ duties that were so far not being refunded.

– The RoDTEP ​​rates would be notified shortly

– The RoDTEP will be allowed, ​​subject to exclusions and specified conditions,

Implementation of RoDTEP Scheme in Customs Automated System–How Declarations will take place in Shipping Bill & further processing.

Kind reference is drawn to the press note issued by CBIC on 31.12.2020 on the new RoDTEP scheme being operationalized from 01.01.2021. Mandatory changes in the System have also been made to accept & process RoDTEP claims.

Here we are presenting explanation on the provisions enabled in System in relation to the new scheme:

1. Claim in the Shipping Bill:

  • From 1st January 2021, it is compulsory for the exporters to indicate in their Shipping Bill whether or not they have the intention to claim RoDTEP on the export items. This claim is essential for the items (RITC codes) notified under the new scheme.
  • The corresponding rates for RoDTEP scheme and the final list of Reduced Income Tax Credit (RITC)codes eligible for RoDTEP scheme are about to be notified by the Government, this declaration has been made compulsory for all items in the Shipping Bill starting 1st January 2021.
  • RoDTEP rates will be notified according to the Reduced Income Tax Credit codes Code and therefore, there is no requirement to declare any schedule serial no. for RoDTEP.
  • Vital point to note that if RODTEPY is not particularly claimed in the Shipping Bill, no RoDTEP would accumulate to the exporter. For RoDTEP the items and rates are not notified by the Government yet. The exporters require to indicate their motive for claim at the time of Shipping Bill filing itself. Once the rates are notified by the govt., System would calculate the amount for RoDTEP automatically for all the items where RODTEPY (INFO CODE = RODTEPY – If RoDTEP is availed If RoDTEP is availed) was claimed. No changes will made after the filing of the EGM.
  • There are some checks built in the System to discard RoDTEP benefit where the advantage of certain other schemes like Advance Authorization, EOU, and Jobbing etc. has been availed. At the time Shipping Bill filling, while some checks have been created in within the System. It is assumed that if the exporter has submitted with the Shipping Bill, the claim to RoDTEP has been made for the purpose that no improper benefit would be availed.

2. Processing of the Claim:

  • Based on the declarations system will be processed the eligible RoDTEP.
  • The Shipping Bills with Remission of Duties and Taxes on Exported Products (RoDTEP) and/or Drawback claim will now be routed for officer intervention on the basis of Risk based targeting by Risk Management System (RMS). After the EGM is filed, all the Shipping Bills will be sent to RMS. On the basis of input by RMS, Shipping Bills will either come to officer for processing of RoDTEP/DBK advantages or will directly be facilitated to the scroll queue without any officer intervention.
  • Once the Shipping Bill is processed for DBK and/or RoDTEP either by the officer or as per facilitation by Risk Management System (RMS), it will move to the respective scroll queues.

3. Generation of Scroll:

  • In system, options have been made available for officers to beget RoDTEP scrolls. These options will remain disabled in System till the final rates are notified by the Government.
  • Once the scroll is begat, the respective amounts would be available with the exporter in the form of credits on the ICEGATE portal.

4. Claim of Credits & Generation of Credit Scrips:

  • Once the RoDTEP scroll is generated, to claim and covert into a credit scrips the credits allowed will be available within their exporter’s ICEGATE login.
  • Once the Scrips generated, it will reflect in the ledger of exporter and will be accessible for utilization in paying eligible duties during imports or for transfer to any other entity having import export code and a valid ICEGATE registration. A detailed advisory related with the advantage of the exporter on the scrip generation and many more will be published soon on ICEGATE by the government. These facilities will be available when the final RoDTEP rates are notified by the government and scroll generation is enabled.

5. Utilization of Scrips in Imports:

  • These scrips may be used for the payment of import duties as would be notified by CBIC.
  • The scrip’s owner will be able to use the scrip in the Bills of Entry as any other duty credit scrips issued by DGFT. The scheme code to be used for these scrips would be “RD” along with the applicable notification no.
  • Once the scroll generation is enabled then an option to suspend any RoDTEP scrip will also be made available with the Customs officer. If a scrip is under suspension, the utilization or transfer of scrips will not be allowed by System.