RoDTEP Scheme Extended to June 2024: A Boon for Exporters and MSMEs in India

The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, introduced in 2021, covers a wide range of export products, totaling 10,610 in number. Over time, the scheme has undergone multiple extensions and improvements, with the most recent extension, which was set to expire this month, providing exporters with much-needed relief. All the exporters are eligible to take benefit under this scheme. In the fiscal year 2023, the RoDTEP scheme provided support for exports worth an astounding $450 billion, at a cost of Rs 13,020 crore. In the preceding fiscal year, it facilitated $421 billion in exports and incurred a cost of Rs 12,100 crore. The RoDTEP scheme has a budget of Rs 15,070 crore earmarked for FY24. This opens doors to new opportunities and markets, furthering the growth and development of MSMEs in India.

To further bolster the export sector, a dedicated committee has been constituted within the Department of Revenue. This committee's primary objective is to review and recommend changes to the ceiling rates offered under the RoDTEP Scheme for various export sectors. The inauguration of this committee demonstrates the government's commitment to nurturing export businesses and ensuring they remain competitive on the global stage.

MSMEs have been at the forefront of advocating for enhanced budgetary allocations to the RoDTEP scheme and higher incentive rates for all export items. This extension and the forthcoming rate review holds the potential to alleviate the concerns of MSMEs, making it easier for them to participate in international trade.

The RoDTEP scheme operates as a refund mechanism for various duties, taxes, and levies that contribute to the cost of products meant for export. For MSMEs, this scheme offers a lifeline by reducing the financial burden associated with exports, making their products more competitive in the global market.

Which taxes are intended to be compensated to the exporters in RoDTEP Scheme?

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;

2. Electricity duty on purchase of electricity;

3. Mandi Tax/ Municipal Taxes/ Property Taxes;

4. Stamp duty on export documents

Exporters can apply for the RoDTEP scheme by following the below steps:

• Create an e-Scrip account on the ICEGate website (icegate.gov.in).
• File an application using a Class 3 Individual type digital signature certificate (DSC).
• Declare ‘RoDTEPY’ on the shipping bill to claim the benefits provided under the RoDTEP scheme.
• If the exporter does not want to avail the benefits, they should declare ‘RoDTEPN’ on the shipping bill.
• The benefit under RoDTEP scheme would be in the form of transferable duty credit scrip, or it may be in the form of electronic scrip which will be maintained in the electronic ledger.
• It is important to note that before claiming RoDTEP, it is mandatory to indicate on the shipping bill that the exporter will be claiming from this scheme on their export items by making a declaration of ‘RoDTEPY’.
• For more details, visit:

 https://cip.icegate.gov.in/CIP/static/images/doc/RoDTEP/FAQ2.pdf

So, if you're an exporter, especially an MSME, it's time to leverage the extended RoDTEP scheme to your advantage. Navigate international contracts with newfound confidence and competitiveness, and join the league of successful Indian exporters.