Context:
The government has extended support to outbound shipments by stretching the applicability of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for nine more months till June 30, 2024.
Key Details of the Scheme
What is RoDTEP Scheme?
- It would refund to exporters the embedded central, state and local duties or taxes that were so far not been rebated or refunded.
- The rebate under the scheme would not be available in respect of duties and taxes already exempted or remitted or credited.
When it was launched?
- Launched in January 2021 as a replacement for the Merchandise Export from India Scheme (MEIS).
Why was MEIS replaced?
- Because it was not compliant with the rules of the World Trade Organisation.
- As it provided additional benefits of 2% to 7% on the Freight On Board (FOB) value of eligible exports.
Is this common for all exporters?
- No. For garment exporters, the Rebate of State and Central Levies and Taxes (RoSCTL) Scheme has been notified separately.
What is refund rates range and how it must be claimed?
- The tax refund rates range from 0.5% to 4.3% for various sectors.
- The rebate will have to be claimed as a percentage of the Freight On Board value of exports.
Who notifies the RoDTEP rates?
- The RoDTEP rates would be notified by the Department of Commerce.
How will the rebates be issued?
- Rebates will be issued in the form of a transferable duty credit/ electronic scrip (e-scrip)
Who maintains rebates/e-scrip?
- It will be maintained in an electronic ledger by the Central Board of Indirect Taxes and Customs (CBIC).
What is Freight on Board (Free on Board) – FOB?
- It is a term used to indicate who is liable for goods damaged or destroyed during shipping.
- “FOB origin” means the buyer is at risk and takes ownership of goods once the seller ships the product.
- “FOB destination” means the seller retains the risk of loss until the goods reach the buyer.
Source: The Hindu
Previous Year Question
Which of the following best describes the term ‘import cover’, sometimes seen in the news?
[UPSC Civil Services Exam – 2016 Prelims]
(a) It is the ratio of value of imports to the Gross Domestic Product of a country
(b) It is the total value of imports of a country in a year
(c) It is the ratio between the value of exports and that of imports between two countries
(d) It is the number of months of imports that could be paid for by a country’s international reserves
Answer: (d)
