The export business helps millions of people and companies in India. The government also came up with the RoDTEP Scheme to ensure that Indian products are competitive in the world markets. A lot of exporters are yet to comprehend how it’s working. This brings about misunderstanding and lost gains. The present blog describes the scheme in an easy and straightforward manner.
E-Startup is one such firm that assists exporters in the best manner to understand government export schemes with complete legal clarity and step-by-step guidance.
What Is the RoDTEP Scheme and Why Was It Introduced?
- RoDTEP Scheme refers to Remission of Duties and Tax on Exported Products. It started on 1 January 2021. The government introduced it as a replacement for the previous MEIS scheme.
- In the past, the exporters had to pay numerous underhanded taxes. These were electricity charges, fuel taxes, mandi charges, and transport taxes. The government did not refund these taxes. This heightened the cost of exports and decreased competitiveness in the world.
- The new system reimburses these hidden taxes. It assists the Indian exporters to sell at lower prices in the foreign markets. The scheme is compliant with the international trade laws and does not create controversies at the WTO level.
- The refunds are in the form of digital duty credit scrips. Exporters can use these scrips to pay customs fees on imports.
- Firms like E-Startup help exporters to know how such refunds would actually affect profitability and pricing strategy.
Who Is Eligible Under the RoDTEP Scheme?
The RoDTEP Scheme has wide and easy eligibility. The exporters, big and small, may apply.
Eligible exporters include:
- Manufacturer exporters
- Merchant exporters
- Exporters to other countries who send their goods.
- Exporters with an effective IEC.
The merchandise has to be below the announced tariff lines. Exporters must report the scheme while submitting the shipping bill . This statement is obligatory.
This scheme does not cover service exporters. The exporters who are in the domestic trade alone are also out of its scope.
Firms like E-Startup help new exporters to check the eligibility prior to committing the expensive filing errors.
RoDTEP Rates and Refund Calculation
Rates under the RoDTEP Scheme will be based on the product category. The government publishes a rate list of the notified products. The government provides these rates either as a percentage of the export value or as a fixed unit amount.
The refund depends on:
- FOB value of exported goods
- HS code of the product
- Government-approved rate
- Maximum value limit where necessary.
Rates usually range from 0.3% to 4.3%. Refunds are made on some products in terms of rupees per piece or per kilogram.
The refund is registered as an electronic voucher. This script will be in the ICEGATE account of the exporter. It can also be transferred to another party by the exporter himself.
Documents Required to Claim RoDTEP Benefits
Documentation is important in successful claims of the RoDTEP Scheme. Delays are normally brought about by mistakes in paperwork.
The main documents include:
- Import Export Code (IEC)
- Commercial invoice
- Packing list
- RoDTEP declaration, billing shipping.
- Bill of lading or airway bill
- Export General Manifest (EGM)
- Bank realization proof
The information should be similar in all documents. Wrong values or HS codes may slow down or impede refunds.
E-Startup reviews the exporters’ documentation before filing. This reduces the likelihood of rejection.
Step-by-Step Application Process
The exporters will have to file the benefit form on the ICEGATE portal. When submitting the shipping bills, the RoDTEP scheme needs to be chosen by the exporters.
The full process includes:
- Get a shipping bill filed with the RoDTEP option.
- Allow customs to ship the shipment.
- Ensure correct EGM filing
- Create a credit script on duty on ICEGATE.
- Use or transfer the script
Failure to select the scheme at the stage of shipping bills makes the recovery hard. In the majority of instances, the benefits are then lost.
Key Benefits for Exporters
The RoDTEP Scheme provides direct financial assistance as well as long-term business benefits.
Major benefits include:
- Refund of embedded taxes
- Reduce export operating expenses.
- Opponent pricing at the international level.
- Improved profit margins
- Digital and transparent processing.
- Duty credits can be transferred easily.
These advantages empower the small exporters and large producers. The scheme also helps in boosting long-term growth in exports.
Common Mistakes Exporters Should Avoid
Some exporters end up losing their refunds following mere errors. These errors are not always big but lead to significant losses.
Avoid these common problems:
- Lack of the RoDTEP declaration on shipping bills.
- Wrong HS code selection
- Inconsistency in the value of invoices and shipping.
- Delay in EGM filing
- Undocumented exportation.
Periodic review and proper filing can prevent such losses by the exporters.
Final Thoughts on the RoDTEP Scheme
RoDTEP Scheme has enhanced the system of supporting exports in India. It makes sure that there is no longer concealed taxation that will diminish the profits of exports. The exporters are now competing on reasonable prices across the world markets.
The scheme is easy to use when the exporters are conversant with the eligibility, rates, and documents. When properly implemented, the businesses are able to enhance their cash flows, margin and long-term growth of their exports. E-Startup continues to guide exporters within India on export compliance, documentation, and government benefits with expert support.
FAQs
Q1. Are there any new exporters eligible to receive the benefits of RoDTEP?
Yes, new exporters are eligible in case they possess a valid IEC and export notified products.
Q2. What is the duration during which RoDTEP duty credits can be obtained?
Authorities normally reflect this information within two to four weeks after processing relevant shipping bills and EGM.
Q3. May I assign my RoDTEP duty credit scrip to a different importer?
Yes, the script is totally transferable, so another importer can purchase or use it.
Q4. Are all export products covered by RoDTEP?
No, only those products that fall under the notified tariff lines would qualify.
Q5. What happens if I forget to select the scheme in the shipping bill?
The benefit is not retained by the exporters in most cases unless the declaration is made at the filing stage.
If you need further assistance or have any doubts, our experts are here to help you. Call us: 8881-069-069.
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