The Union Cabinet on March 13, approved to replace the MEIS (Merchandise Export from India) Scheme with RoDTEP (Remission of Duties or Taxes on Export Product) Scheme.
What are the MEIS and RoDTEP Schemes?
The MEIS Scheme was introduced under the Foreign Trade Policy of India (FTP 2015-20) which offers export incentives between 2% and 5%.
RoDTEP Scheme was announced by the Finance Minister with an aim of making Indian products competitive in the Global market. It was launched for exporters to reimburse their taxes and duties and incentivize exporters at a cost of Rs 50,000 crores.
Both MEIS and RoDTEP Schemes were launched under the policy namely MEIS and SEIS.
The RoDTEP Scheme was introduced by the Cabinet Committee on Economic Affairs (CCEA) led by PM Narendra Modi. The Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) will be in line with “Digital India” and will create a mechanism for reimbursement of taxes/ duties/ levies at the central, state, and local levels.
RoDTEP Scheme Details
- Remission of Duties and Taxes on Exported Products Scheme will provide a level playing field for Indian producers in the International market and boost the domestic industry and Indian exports. This will prevent domestic taxes/duties from getting exported.
- The rates and items for which the reimbursement of taxes and duties would be provided will be determined by an inter-ministerial committee.
- The refund will be in the form of transferable duty credit/electronic scrip that. It will be issued to the exporters and will be maintained in an electronic ledger.
- The Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP Scheme) will be implemented with end-to-end digitization.
- It will be a step towards the zero-rating of exports, along with refunds.
- Remission of Duties and Taxes on Exported Products Scheme is expected to lead cost competitiveness of exported products in international markets. It can also provide better employment opportunities in export-oriented manufacturing industries.
- RoDTEP Scheme will contribute to the overall economy by increasing productivity and boosting exports.
Highlights of RoDTEP Scheme
The government is anticipating a fall in exports due to coronavirus outbreak and hence is replacing the Merchandise Export Incentive Scheme (MEIS) with Remission of Duties and Taxes on Exported Products since The RoDTEP Scheme is compliant with WTO (World Trade Organization) norms.