Atmanirbhar Bharat - RoDTEP (Remission of
Duties or Taxes on Export Products) Scheme can be a game changer in boosting
exports
· RoDTEP Scheme (Remission of Duties or
Taxes on Export Products) announced on 14th Sep’19 by
the Hon’ble Finance Minister is a progressive towards boosting exports and
employment generation in various sectors in the country.
Ø It
will replace the existing Merchandise Exports from India Scheme (MEIS)
Ø INR
50,000 Cr. budget provision was kept for RoDTEP by Finance Minister
· Cabinet approved RoDTEP Scheme on 13th March,
2020
Ø RoDTEP
scheme is WTO compliant, will reimburse taxes/duties/levies at the central,
state and local level, which are currently not being refunded
Ø 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.
However, the implementation
of RoDTEP has not moved much since then. The industry is in dire need of some
support to relieve it from the burden of high taxes and duties. For Example :
· The Indian Aluminium industry is
struggling to retain global competitiveness
Ø Huge
burden of unrebated Central & State taxes and duties, constituting ~15% of
Aluminium production cost which is amongst highest in the world.
(~5000 Cr of taxes on Aluminium exports
in FY19)
Ø While
other countries support Aluminium industry through various incentives/
subsidies, cheaper power with long term tie-ups, preferential gas allocation,
tax benefits, export incentives, low interest rate loans etc. for enhanced
competitiveness.
Ø Indian
exports are also suffering due to the measures taken by the USA , imposing 10% tariffs on Aluminium imports
and granting exemption to Australia ,
Argentina , Canada and Mexico , which constitutes almost
50% of US Aluminium imports.
Ø
Moreover, the
USA’s withdrawal of GSP status (Generalized System of Preferences) for India
has also hit the Indian Aluminium exports, which are now subjected to
additional 2.6% to 6% MFN duties over and above the 10% tariffs imposed under
section 232, while the same Aluminium product from Canada, Mexico, Argentina
& Australia is imported in US at zero duty, and Middle Eastern countries
like Oman, Bahrain etc. enjoy MFN duty exemption due to existing FTA with USA.
· Indian Aluminium industry has submitted
all the required data in prescribed formats to DGFT.
Support Sought :
Ø
The Min of
Commerce and Industry needs to take decisive steps for expediting formulation
of RoDTEP Scheme on priority for priority sectors which have huge
export potential e.g. Aluminium, Steel & Textile industry to boost
exports with adequate remission of unrebated Central & State duties &
taxes which constitutes around ~15% of Aluminium production cost.
Without loosing time in paperwork
the Govt should consider enhancing MEIS benefit (Merchandise Exports from India
Scheme) from current 2% to 5% for all Aluminium products under Chapter-76 till
RoDTEP Scheme is implemented