Why is it in the news?
- Recently, the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme has been extended by the government for nine more months, until June 30, 2024.
- This extension comes in response to seven consecutive months of declining goods exports until August.
- The extension of the scheme will maintain the existing rates for different export items, aiding exporters in negotiating better terms for export contracts in the current international environment.
About the Scheme
- The RoDTEP scheme aims to provide support to outbound shipments by reimbursing taxes, duties, and levies incurred by exporters in the production and distribution process.
- It wasstarted in January 2021 as a replacement for the Merchandise Export from India Scheme (MEIS), which was not compliant with the rules of the World Trade Organization and was initially applicable until September 30 of the same year.
- By March 2023, exporters had received tax remission support worth ₹27,018 crore under the RoDTEP scheme.
Enhance India’s Competitiveness:
- The reimbursement of taxes such as duty on power charges, Value-Added Taxon fuel in transportation, Farm Sector will make Indian products competitive in global markets.
- It is expected to significantly impact India’s competitiveness, trade flows and export numbers over the next 5-10 years.
Par with International Standards:
- Indian exporters will be able to meet the international standards for exports as affordable testing and certification will be made available to exporters within the country instead of relying on international organizations.
- This would increase the economy for the country and working capital for the enterprise.
Automated Tax Assessment:
- Also under it, tax assessment is set to become fully automatic for exporters. Businesses will get access to their refunds for GST (Goods and Services Tax)via an automatic refund-route.