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All about the RoDTEP Scheme in exports
Export Sector
Federation of Indian Export Organisations
127 week ago — 20 min read
In our previous articles we discussed how to start an export business, general provisions regarding export and import, Reserve Bank of India (RBI) regulations for exporters, all about GST under exports and E-way Bill. In this article we will address frequently asked questions regarding the Remission of Duties & Taxes on Export Products (RoDTEP) Scheme.
Q. What is RoDTEP Scheme?
RoDTEP scheme is notified with an Objective to neutralize the taxes and duties suffered on exported goods which are otherwise not credited or remitted or refunded in any manner. The benefit is given as percentage of FOB or fixed amount per unit of measurement as prescribed in the Appendix 4R to the Notification.
Q. Are any governing regulatory bodies there for the RoDTEP?
RoDTEP scheme is notified by the Department of Commerce. The Scheme shall be fully administered by the Department of Revenue. A separate RODTEP Policy Committee (RPC) chaired by DGFT is constituted to address residual issues related to the Scheme.
Q. What is the effective date of claiming the RoDTEP?
RoDTEP has been made effective from 1st January 2021 in respect of those exports where intention to claim the benefit has been manifested on the shipping bills.
Q. What is the criteria to announce the RoDTEP and whether it is available on all the products or on selective products?
RoDTEP scheme is notified based on the classification of the products as per tariff heading at 8-digit level. The benefit is given for 8555 tariff items. However, there are some sectors i.e. steel, pharmaceuticals, chemical, textiles (covered by ROSCTL) etc. which have presently not been given benefit under the Scheme.
Q. Where one can assess the RoDTEP Rates?
The Appendix 4R of Handbook of Procedures may be assessed to check the Rates.
Q. Which taxes are intended to be compensated to the exporters in RoDTEP Scheme?
The scheme intends to compensate the duties/taxes/levies at the Central, State and Local level borne on the exported product including prior stage cumulative indirect taxes on goods and services used in the production and distribution of the exported product such as:
i. VAT and Excise duty on the fuel used in self-incurred transportation costs; on the fuel used in generation of electricity via power plants or DG Sets; on the fuel used in running of machineries/plant;
ii. Electricity duty on purchase of electricity;
iii. Mandi Tax/ Municipal Taxes/ Property Taxes;
iv. Stamp duty on export documents;
v. Un-creditable CGST/ SGST/ IGST/ Compensation Cess on items falling under [passenger transportation vehicles, food and beverages, rent-a-cab, works contract services, etc.]
Q. Whether Scheme is applicable only to the manufacturer and exporter of goods or to all type of exporters?
The benefit under the Scheme is available to all exporters irrespective of their status in respect of the goods manufactured in India.
Q. What are ineligible categories under the Scheme for claiming benefit?
Following are ineligible categories:
(i) Exports of imported goods as per para 2.46 of FTP i.e. Import for Export
(ii) Exports through transhipments, meaning exports originating in third country but transshipped through India
(iii) Export products subject to minimum export price or export duty
(iv) Products restricted for exports under Schedule 2 of Export Policy in ITC (HS)
(v) Products prohibited for exports under Schedule 2 of Export Policy in ITC (HS)
(vi) Deemed Exports
(vii) Supplies of products manufactured by DTA units to SEZ/FTWZ units
(viii) Products manufactured in EHTP and BTP
(ix) Products manufactured partly or wholly in a warehouse under section 65 of Customs Act, 1962 (i.e. MOOWR etc)
(x)* Products manufactured or exported in discharge of export obligation against advance authorisation or DFIA or special advance authorisation issued under a duty exemption scheme of relevant FTP
(xi)* Products manufactured or exported by 100% EOU
(xii)* Products manufactured or exported by any of the units situated in FTZ, EPZ or SEZ
(xiii) Products manufactured or exported availing the benefit of Notification No 32/1997- Customs (i.e. jobbing transactions)
(xiv) Exports for which electronic documentation in ICEGATE EDI has not been generated or exports from Non-EDI port
(xv) Goods which have been taken into use after manufacture (i.e. second hand goods)
*The Scheme provides that the exporters under the categories of SEZ, EOU, Advance Authorisation etc. would be covered by the Scheme at a later date.
Q. Whether realisation of foreign currency for the RoDTEP benefit is necessary?
The Scheme provides that the rebate would not be dependent on the realization of export proceeds at the time of claim of rebate. However, the rebate is allowed subject to receipt of sale proceeds within the timeframe allowed under the Foreign Exchange Management Act, 1999 failing which such rebate shall never be deemed to have been allowed.
Q. What is the broad procedure of claiming the benefit of these e-scrips?
(i) To avail the scheme exporter shall make a claim for RoDTEP in the shipping bill by making a declaration.
(ii) Once EGM is filed, claim will be processed by Customs.
(iii) Once processed a scroll with all individual Shipping Bills for admissible amount would be generated and made available in the users account at ICEGATE,
(iv) User can create RoDTEP credit ledger account under Credit Ledger tab. This can be done by IECs who have registered on ICEGATE with a DSC.
(v) Exporter can log in into his account and generate scrip after selecting the relevant shipping bills.
Q. How can one create an Escrip Account?
Escrip account can be used by the Importer/Exporter/CHA only after creating it at ICEGATE. The user has to be a valid IEC Holder registered on ICEGATE with a DSC. Below are the steps to create an Escrip Account with ICEGATE.
Step 1: User can select the option of Escrip account creation by clicking on the “Escrip” tab under the “Our Services” section of https://www.icegate.gov.in/
Step 2: User will be directed to the login page. After log in using valid credentials, user will be able to see the escrip option under the Financial Services on the left panel. If user is not registered they can get themselves registered as per advisory through this link:
Step 3: Since the user has not created an escrip account initially, the following page will be displayed. The user can select the scheme name from the drop-down as RoSCTL or RoDTEP and click on Create Escrip Account button.
Step 4: After Credit Ledger account creation is done by the user, a grid view with the following details will be displayed to the user.
User can perform various operations mentioned as follows from this Home Page:
- Shipping bill details
- Scrip Details
- Transaction Details
- Scrip Transfer
- Approve Scrip Transfer
- Add Scheme
Q. How a user can claim the benefit of the scheme in the Shipping Bill?
In order to claim the benefit of the RoDTEP, The exporter will have to make following declarations in the SW_INFO_TYPE Table of the Shipping Bill for each item:
INFO TYPE = DTY
INFO QFR = RDT
INFO CODE = RODTEPY - If RoDTEP is availed
RODTEPN – if not availed.
INFO MSR = Quantity of the items in Statistical UQC as per the Customs Tariff Act for that item RITC INFO UQC = UQC for the Quantity indicated in INFO_MSR Additionally, for every item where
RODTEPY is claimed in INFO CODE, a declaration has to be submitted in the Statement Table of the Shipping Bill as below.
STATEMENT TYPE = DEC STATEMENT CODE = RD001
Submission of the above statement code for RoDTEP availed items would indicate that the exporter has made the necessary declaration, while claiming RoDTEP benefit.
Based on the above declarations, system would process the eligible RoDTEP. Options have been made available in system for officers to generate RoDTEP scrolls. Once the scroll is generated, the respective amounts would be available with the exporter as credits on the ICEGATE portal. Scrips once generated will reflect in the exporter’s ledger and will be available for utilization in paying Basic Customs Duty during imports or for transfer to any other entity having IEC and a valid ICEGATE registration.
Q. How a user can claim the credit and generate the e-credit scrips on the online ICEGATE Portal?
Step 1: From the Escrip Home Page, user can select SB Details Tab for scrip generation
Step 2: User is provided with the feature of selecting Shipping bills/scrolls for which the scrips are to be generated. User can select RoSCTL or RoDTEP under scheme name and location.
Step 3: An error message will be displayed if the scheme is not selected since it is a mandatory field.
Step 4: User can view and select the shipping bills and can click on “Generate Scrip” button to generate scrip. User can select all the shipping bills at once by checking box in first row.
Step 5: Scrip will be generated for the selected shipping bill/ scroll. After successful Scrip Creation the following message will be displayed on the screen.
“Scrip No.:XXXXXXXXXX has been generated successfully”
Q. What is the procedure for transfer of the e-credit scrips?
Any user who has created an Escrip account can transfer a scrip to another user. The user to which the scrip is to be transferred also needs to have a valid Escrip account.
Below are the steps for scrip transfer:
Step 1: From the Escrip Home page, user can select the “Scrip Transfer” tab to transfer a particular scrip to any other user.
Step 2: It is mandatory to select a scheme, RoDTEP or RoSCTL in order to select the scrips to be transferred.
After that, the user can select the appropriate scrip to be transferred from the generated scrips. The list of the generated scrips is available in the drop-down menu along the “Scrip Available” Option.
Step 3: After appropriate scrip selection, user can view scrip amount and enter IEC of the user to which the scrip is to be transferred. These details, of the IEC holder to whom the user wants to make transfer, can be entered in the textbox alongside “Transfer To” option.
Step 4: OTP is generated and sent to the user who has initiated the transfer on the registered mobile number and email ID. It has to be entered by that user to transfer the scrip successfully. This OTP is valid for a window of 15 minutes only. An error message will be displayed to the user if wrong OTP is entered.
Step 5: After successfully transferring the request, Scrip will be viewed in a grid on the same page. User who has initiated the transfer scrip request can cancel the request at this stage using the cancel button.
Approve Scrip Transfer Request
Step 1: An approval request is sent to the IEC for whom transfer request has been initiated by the user. This IEC holder who has to approve the request needs to login, select Escrip tab under Financial Services. He will have to create an Escrip account if not already created.
Step 2: From the Escrip Home page, the user to whom a scrip is transferred can approve/cancel the transfer scrip request by clicking on the “Approve Scrip Transfer” tab.
Step 3: User can view all scrips, which are requested to be transferred to him. User can cancel the request as well by clicking on the cancel button, if does not wish to accept the scrip.
Step 4: The transferee can approve the transfer scrip request after clicking the approve button, Transfree has to fill a valid OTP. After clicking the Approve button, the transferee is directed to fill OTP. This OTP is generated and sent to the transferee over registered Mobile number and email ID and is valid only for 15 minutes. In case, the user fails to enter a valid OTP in 15 minutes, the user is redirected to generate a new OTP.
Step 5: The Scrip will be transffered to Transfree after successful OTP validation. Message is also generated and displayed on the screen:
“Scrip XXXXXXXXXX has been transferred Successfully”
Q. What is the declaration that needs to be filed at the time of filing the Shipping Bill?
At the time of filing the shipping bill under the RoDTEP scheme, following declaration must be filed:
“I/We, in regard to my/our claim under RoDTEP scheme made in this Shipping Bill or Bill of Export, hereby declare that:
I/ We undertake to abide by the provisions, including conditions, restrictions, exclusions and time-limits as provided under RoDTEP scheme, and relevant notifications, regulations, etc., as amended from time to time. Any claim made in this shipping bill or bill of export is not with respect to any duties or taxes or levies which are exempted or remitted or credited under any other mechanism outside RoDTEP.
I/We undertake to preserve and make available relevant documents relating to the exported goods for the purposes of audit in the manner and for the time period prescribed in the Customs Audit Regulations, 2018.”
Q. Whether ledger to be maintained at GSTIN level or IEC level?
The ledger should be maintained at IEC level.
Q. Whether benefit is available even if the consideration is received in INR instead of convertible foreign exchange?
There are no restrictions on realization of amount in INR and the exporters can claim the benefit of the Scheme.
Q. A merchant exporter procuring goods for exports @ 0.1.%& under GST. Can he claim RoDTEP?
Benefit of RoDTEP could be claimed in respect of the goods directly exported from India to outside India in respect of goods manufactured in India.
Q. Whether goods can be exported on payment of GST while claiming the benefit of RoDTEP?
Yes, there are no restrictions of making export of goods on payment of GST simultaneous to claiming benefit of RoDTEP.
Q. What would be the implications on Capital goods imported under EPCG license to neutralise the BCD cost.
The restriction under the Scheme does not cover the capital goods imported under EPCG Scheme. Thus, exporter may continue to claim the benefit of EPCG and RoDTEP simultaneously.
Q. Whether RoDTEP would be credited in exporters’ bank account similar to duty drawback?
RoDTEP would be issued in the form of transferrable e-scrips which will be maintained in an electronic credit ledger by the CBIC and could be used for paying Basic Customs Duty on import of goods or may be transferred electronically to other party. The benefit will not be in the form of direct credit to the bank account.
Q. If an exporter has not been able to mention the option of claiming RoDTEP in shipping bills in respect of the past transactions, what should he do now?
W.e.f. 01.01.2021, it is mandatory for the exporters to indicate in their Shipping Bill whether or not they intend to claim RoDTEP on the export items. It has been categorically specified by the CBIC that, if RODTEPY is not specifically claimed in the Shipping Bill, no RoDTEP would accrue to the exporter.
Q. Can a textile exporter claim ROSCTL along with RoDTEP?
It is pertinent to note that RoSCTL Scheme is eligible for the export of apparels and made-ups only, i.e., the textile goods covered under Chapter 61, 62 & 63 of the HS Tariff Code. Hence, for exports of apparels and Made-ups RoDTEP is not available, if such products are covered under the RoSCTL. For other textile items, RoDTEP may be claimed at the prescribed rates.
Q. Is the benefit of RoDTEP is available on merchanting transactions?
In case of merchanting transaction, the movement of goods commences and concludes outside India. These are covered in the ineligible categories for the benefit of RoDTEP.
Q. Whether RoDTEP benefit can be claimed for the services provided outside India?
The benefit under the scheme can be claimed only in respect of the duties/ taxes/ levies etc. borne on the exported product either used for production of the exported product or for its distribution. Therefore, the present scheme does not allow the benefit in case of service exports outside India.
Q. If a product of an exporter has not been covered in the RoDTEP Scheme, what he should do?
The RoDTEP scheme operates under the budgetary framework wherein the budget would be derived towards this scheme for each financial year and necessary calibrations and revisions shall be made to the scheme benefits, as and when required. As is provided in DGFT Notification No. 19/2021 efforts would be made to review the RoDTEP rates on an annual basis and to notify them well in advance before the beginning of the financial year. Therefore, if any sector or goods are not covered under the scheme or the quantum of benefit is low as compared to the actual cost of taxes incurred, then a timely representation may be filed before the Ministry for consideration at the time of next review.
Q. Whether there is concept of special rate fixation under RoDTEP similar to the special brand rate of drawback?
No, as per the Notification No. 19/2021 Dt. 17.08.2021, it is seen that presently there is no mechanism to fix a brand rate as in the case of drawback based on the actual cost incurred by the exporters on account of various taxes and levies. Further, since the claim processing is automated based on the details submitted in the shipping bill, it looks that presently no option is provided for the exporter to compute the benefit on a brand rate basis of the actual cost.
Q. There are some exporters who have been classified as ‘risky’ and their GST Refunds and Drawback are withheld till the risky tag is removed. What would be impact on the RoDTEP benefit on such exporters.
The Notification No. 19/ 2021 clearly speaks that necessary provisions would be provided for suspension/ withholding of the RoDTEP in case of frauds and misuse, as well as imposition of penalty will be built suitably by the CBIC.
Q. Whether e-commerce exports will be eligible for RoDTEP benefit?
The benefit of the scheme may be eligible provided there is a physical export of the goods from an EDI port. Also, the corresponding shipping/ Airway bill must be in the name of the exporter.
To learn how to promote your business to foreign buyers, GlobalLinker recently conducted a special webinar with Mr Ashsih Jain, Deputy Director General, FIEO. Watch the highlights below.
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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.
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