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- Recently, the government had left out sectors such as iron and steel, chemicals and pharmaceuticals, from the Remission of Duties and Taxes on Export Products (RoDTEP) scheme.
- These sectors were omitted from the scheme, as iron and steel were ‘already booming’ and the pharma industry’s business had also increased during the pandemic.
- The RoDTEP scheme would refund to exporters the embedded central, state and local duties or taxes that were so far not been rebated or refunded and were, therefore, placing India’s exports at a disadvantage.
- The rebate under the scheme would not be available in respect of duties and taxes already exempted or remitted or credited.
- It was started in January 2021 as a replacement for the Merchandise Export from India Scheme (MEIS), which was not compliant with the rules of the World Trade Organisation.
- The MEIS scheme provided additional benefits of 2% to 7% on the Freight On Board (FOB) value of eligible exports.
- For garment exporters, the Rebate of State and Central Levies and Taxes (RoSCTL) Scheme has been notified separately.
- The reimbursement of taxes such as duty on power charges, Value-Added Tax on fuel in transportation, Farm Sector etc. will make Indian products competitive in global markets.
- It is expected to significantly impact India’s competitiveness, trade flows and export numbers over the next 5-10 years.
- Indian exporters will be able to meet the international standards for exports as affordable testing and certification will be made available to exporters within the country instead of relying on international organizations.
- This would increase the economy of the country and the working capital for the enterprise.-
- Also under it, tax assessment is set to become fully automatic for exporters.
- Businesses will get access to their refunds for GST (Goods and Services Tax) via an automatic refund route.
SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT
