RoDTEP Scheme

Context: Recently, Centre has notified the rates and norms for the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme asserting that it would put ‘direct cash in the pockets of exporters’ soon.
RoDTEP Scheme

• RoDTEP is a scheme for Exporters to make Indian products cost-competitive and create a level playing field for them in the Global Market.
• It has been kicked in from January 2021, replacing the earlier Merchandise and Services Export Incentive Schemes (MEIS and SEIS) that were in violation of WTO norms.
• The new RoDTEP Scheme is a fully WTO compliant scheme.
• It will reimburse all the taxes/duties/levies being charged at the Central/State/Local level which are not currently refunded under any of the existing schemes but are incurred at the manufacturing and distribution process.

Why need such a scheme?

• The scheme was announced last year as a replacement for the Merchandise Export from India Scheme (MEIS), which was not found not to be compliant with the rules of the World Trade Organisation.
• Following a complaint by the US, a dispute settlement panel had ruled against India’s use of MEIS as it had found the duty credit scrips awarded under the scheme to be inconsistent with WTO norms.

Coverage of the scheme

• It covers about 75% of traded items and 65% of India’s exports.
• To enable zero-rating of exports by ensuring domestic taxes are not exported, all taxes, including those levied by States and even Gram Panchayats, will be refunded under the scheme.
• Steel, pharma and chemicals have not been included under the scheme because their exports have done well without incentives.

Additional Information
About Merchandise Exports from India Scheme (MEIS)

• MEIS was launched with an objective to enhance the export of notified goods manufactured in a country.
• This scheme came into effect on 1 April 2015 through the Foreign Trade Policy and was in existence till 2020.
• It intended to incentivize exports of goods manufactured in India or produced in India.