Disadvantages of the RoDTEP Scheme
- As the rates are substantially lower than MEIS rates with a smaller budget allocation, the program disappointed many exporters.
- In many instances, the rates do not take into account the taxes that are incorporated into their basic materials, such as steel in engineering items.
- Major exports like steel and pharmaceuticals, as well as exports made with an advance authorization, through an EOU (export oriented unit), or through a SEZ (special economic zone), do not appear to be eligible for the advantage.
- It will hurt India’s exports’ ability to compete internationally and create a bad atmosphere among exporters.
- Labor-intensive industries will gain greatly from the MEIS Scheme.
- RoDTEP eligibility does not require a minimum turnover.
- Exports must originate in India in order to be eligible for the program’s advantages.
- Reexported goods are exempt from this.
RoDTEP Scheme
Remission of Duties and Taxes on Exported Products, or RoDTEP, is a brand-new program that the Indian government has introduced to help exporters operate more effectively. On January 1, 2021, the day it was publicized in the press, this program superseded the earlier Merchandise Exports from India Scheme (MEIS). The program’s primary goal is to compensate all exporters for previously non-reimbursable taxes and levies. This encourages international trade by providing exporters with new rewards for sending their goods and services abroad. The program is anticipated to substantially impact India’s ability to compete internationally during the next five to ten years. It is based on the idea that taxes and levies shouldn’t be exported but rather should be waived or remitted to exporters. The customs department will implement RoDTEP. The refund provided by the plan would not apply to previously waived, remitted, or credited duties and taxes. The government has stated that it will spend Rs 12,400 crore on the program. Recently, the Ministry of Commerce and Industry announced the Remission of Duties and Taxes on Exported Products scheme for 8,555 products for the FY 2021–22.