RoDTEP scheme extended until September 30, 2025

In a major announcement for exporters, the Director General of Foreign Trade (DGFT) stated that exporters will continue to receive benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme.  The revised tax refund rates now range from 0.3% to 3.9%, down from the previous range of 0.5% to 4.3% before the latest extension.

The government has extended the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme until September 30, 2025, with revised, lower refund rates. These reduced rates, ranging from 0.3% to 3.9%, are a decrease from the previous 0.5% to 4.3%, and aim to keep the scheme within the budgetary allocation. However, this could mean exporters will not receive full tax remissions, potentially impacting them as exports are currently slowing.

A notification by the Directorate General of Foreign Trade (DGFT) stated that under the extension, exports from Domestic Tariff Area (DTA) units, which are outside special economic zones (SEZ) or export-oriented units (EoU), will be eligible for incentives until September 30, 2025. Meanwhile, SEZ units, EoUs, and Advance Authorisation holders, who can import inputs duty-free for export production, will benefit from the scheme until December 21, 2024.

The new RoDTEP rates, based on recommendations from the RoDTEP committee, will be effective from October 10, 2024. Initially introduced in 2021, the scheme now covers exports of 10,642 products and has undergone several modifications and extensions. Exporters receive incentives in the form of transferable duty credit scrips, which can be used to pay import duties or sold in the market.

For the fiscal year 2024-25, Rs 23,922 crore has been allocated for RoDTEP, compared to Rs 14,874 crore spent in 2023-24. The scheme aims to refund various central, state, and local taxes that add to the cost of exported goods. It was introduced to replace the Merchandise Exports from India Scheme (MEIS), which, along with other export promotion schemes, was challenged at the World Trade Organization by the US.