Since, yesterday I have received more than 50 calls/emails related to implementation of RoDTEP scheme.
Now, I have for reference Public Notice no.01 dtd.01.01.2021 issued by Principal commissioner of customs, Kolkata, which means official instructions have been issued.
I would like to quote the extract of this Public Notice relating to Advance Authorisation holders and EOUs.
Quote:-
2 (e) There are some checks built in the System to disallow RoDTEP benefit where the benefit of certain other schemes like Advance Authorization, EOU, Jobbing etc. has been availed. While some checks have been built in within the System at the time of filing the Shipping Bill, it is assumed that if the exporter (or the authorized Customs Broker) has submitted the statement as mentioned in para 2(b) with the Shipping Bill, the claim to RoDTEP has been made with the undertaking that no undue benefit would be availed.
Unquote:-
The calls were mostly related to above mentioned extract and the questions that were raised are :-
1. If we are EOU OR AA holder, are we eligible for RoDTEP or not?
2. Should we exercise the option ‘Yes’ or not?
It is very surprising that, such a para is added in the instructions. Before commenting, I would like to reproduce the basics of RoDTEP scheme as communicated on 13th March 2020 (Press release of Government of India):
Quote :
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has given its approval on 13 March 2020 for introducing the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) under which a mechanism would be created for reimbursement of taxes/ duties/ levies, at the central, state and local level, which are currently not being refunded under any other mechanism, but which are incurred in the process of manufacture and distribution of exported products. This scheme is going to give a boost to the domestic industry and Indian exports providing a level playing field for Indian producers in the International market so that domestic taxes/duties are not exported.
Under the Scheme an inter-ministerial Committee will determine the rates and items for which the reimbursement of taxes and duties would be provided. In line with “Digital India”, refund under the Scheme, in the form of transferable duty credit/electronic scrip will be issued to the exporters, which will be maintained in an electronic ledger. The Scheme will be implemented with end to end digitization.
The refunds under the RoDTEP scheme would be a step towards “zero-rating” of exports, along with refunds such as Drawback and IGST. This would lead to cost competitiveness of exported products in international markets and better employment opportunities in export oriented manufacturing industries. In line with the vision of Prime Minister, various export oriented industries are being reformed and introduced to better mechanisms so as to increase their productivity, boost exports and contribute to the overall economy.
At present, GST taxes and import/customs duties for inputs required to manufacture exported products are either exempted or refunded. However, certain taxes/duties/levies are outside GST, and are not refunded for exports, such as, VAT on fuel used in transportation, Mandi tax, Duty on electricity used during manufacturing etc. These would be covered for reimbursement under the RoDTEP Scheme.
The sequence of introduction of the Scheme across sectors, prioritization of the sectors to be covered, degree of benefit to be given on various items within the rates set by the Committee will be decided and notified by the Department of Commerce (DoC).
The rebate would be claimed as a percentage of the Freight On Board (FOB) value of exports.
A monitoring and audit mechanism, with an Information Technology based Risk Management System (RMS), would be put in to physically verify the records of the exporters. As and when the rates under the RoDTEP Scheme are announced for a tariff line/ item, the Merchandise Exports from India Scheme (MEIS) benefits on such tariff line/item will be discontinued.
Unquote
When the scheme itself talks of duties and levies outside customs and GST what is the point in saying that, Advance Authorisation holders and EOUs are not eligible. Careful reading of the scheme (and appointment of G.K. Pillai committee, and all the references made by them) very clearly states that, RoDTEP will consider only those taxes which are embedded into the product cost but not refunded by any mechanism and so the taxes considered for RoDTEP scheme are electricity duty, Mandi tax, tax on diesel and petrol used for inbound and outbound transportation etc. etc. By any stretch of imagination one cannot think of double or undue benefit to Advance Authorisation holders or EOUs through RoDTEP scheme. When this is so crystal clear why such para is included which excludes or threaten to exclude Advance Authorisation holders and EOUs, is not understandable.
This matter should be clarified without any further delay.
One more thing, I would like to request all exporters to immediately take up this issue with the Government, as refund of taxes is absolutely legitimate and compliant with WTO rules as far as exports are concerned. I can only point out the problem and probable solution but ultimately Government has to consider this.
Indian exports must grow and therefore, such problems should be immediately solved.
Your views are welcome.
Sudhakar Kasture
Director, EXIM Institute (A Division of Helpline Impex Pvt. Ltd.)
Mumbai.
E-mail: sk@helplineimpex.co.in
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