New Export Promotion Scheme Proposed by the Govt of India- Remission of Duties and Taxes on Exported Products (RoDTEP)
Cabinet Committee on Economic Affairs (CCEA) approves scheme for “Remission of Duties and Taxes on Exported Products (RoDTEP)” to boost exports Scheme for enhancing Exports to International Markets. To make Indian exports cost competitive and create a level playing field for exporters in International market.
RoDTEP scheme is WTO compliant, will reimburse taxes/duties/levies at the central, state and local level, which are currently not being refunded.
To give a boost to employment generation in various sectors Items will be shifted in a phased manner from existing scheme MEIS to RoDTEP with proper monitoring & audit mechanism.
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The Other Trade Promotions Schemes currently Operational are as detailed below.
In the Foreign Trade Policy 2015-20, under Export from India Schemes, there are two Schemes for exports of merchandise and services viz.:
(i) Merchandise Exports from India Scheme (MEIS); and
(ii) Service Exports from India Scheme (SEIS)
The objective of MEIS is to offset infrastructural inefficiencies and associated costs involved in export of goods/products, which are produced/ manufactured in India, especially those having high export intensity, employment potential and thereby enhancing India’s export competitiveness. Similarly, the objective of SEIS is to encourage export of notified Services from India.
Some of the main features of these Schemes are as under:
The MEIS Entitlement would be 2% / 3% / 5% / 7% of FOB value of notified goods exported to notified markets [based on three distinct categories framed and covered in Appendix 3B] in free foreign exchange or FOB value of exports as given in the Shipping Bills in free foreign exchange, whichever is less.
As per recent announcement MEIS will now be replaced by Remission of Duties or Taxes on Export Product (RoDTEP).
Country Groups – Category A: Traditional Markets (30) – European Union (28), USA, Canada. Category B – Emerging & Focus Markets (139), Africa (55), Latin America and Mexico (45), CIS countries (12),Turkey and West Asian countries (13), ASEAN countries (10), Japan, South Korea, China, Taiwan and Category C: Other Markets (70).
Units located in SEZs have also been made eligible for MEIS & SEIS benefit.
Export of goods through Courier or Foreign Post Offices using e-Commerce (as notified in Appendix-3C) of FOB value only upto Rs. 5,00,000/- per consignment are entitled for rewards under MEIS.
Under SEIS, Service providers of notified services (under Appendix 3D) will be eligible for rewards in the form of duty credit scrips @ 5% and 7% on the net foreign exchange earned from notified services (w.e.f. 05.12.2017).
Only services provided in the manner/mode specified at Para 9.51 (i) & (ii) are eligible, i.e. Supply of a ’service’ from India to any other country (Mode 1-Cross border trade) and Supply of a ’service’ from India to service consumers of any other country (Mode 2- Consumption abroad).
Minimum net free foreign exchange earnings of USD 15,000 in the year of rendering service is the eligibility criteria. For Individual Service Providers and Sole Proprietorship minimum USD 10,000/- in the year of rendering service.
|Duty Credit Scrip||
Basic Custom duty paid in cash or through debit under Duty Credit scrip shall be adjusted for Duty Drawback benefits.
As per Trade Notice No. 11 dated 30/06/2017, under the GST regime, the Duty Credit Scrips cannot be used for payment of IGST, GST and Compensation cess in inputs and CGST/SGST/IGST, GST and Compensation cess for domestic procurement.
Duty Credit Scrip issued on or after 01.01.2016 under Chapter 3 shall be valid for a period of 24 months from the date of issue and must be valid on the date on which actual debit of duty is made.
Status Holder Scheme is for business leaders who have excelled in international trade and have successfully contributed to country’s foreign trade.
An applicant shall be categorized as status holder on achieving export performance during the current and previous three financial years (for Gems & Jewellery Sector the performance during the current and previous two financial years shall be considered for recognition as status holder) as under:
|Status Category||Export Performance FOB/FOR
Value (in US $ million)
|One Star Export House||3|
|Two Star Export House||25|
|Three Star Export House||100|
|Four Star Export House||500|
|Five Star Export House||2000|
Privileges of Status Holders
A Status Holder shall be eligible for privileges as under:
All exporters duly registered with relevant EPCs of eligible agriculture products.
The assistance, at notified rates, will be available for export of eligible agriculture products to the permissible countries, as specified from time to time.
|Applicability||The Scheme would be applicable for exports effected from 01.03.2019 to 31.03.2020.|
|Eligibility of products||The assistance will be provided on export of all agriculture products covered in HSN Chapters 1 to 24 including marine and plantation products except those mentioned in Annexure (1).|
|Pattern of assistance||The TMA would be provided in cash through direct bank transfer as part reimbursement of freight paid. FOB supplies where no freight is paid by Indian exporters are not covered under this scheme.|
|The level of assistance would be different for different regions as notified from time to time. Currently, it is available for these regions, namely: West Africa, East Africa, EU, Gulf, North America, ASEAN, Russia & CIS, Far East, Oceania, Cgina and South America. List of export countries in each region eligible for assistance under TMA are mentioned under Annexure (2).|
|The Scheme covers freight and marketing assistance for export by air as well as by sea (both normal and refer cargo), made through EDI ports only and shall be admissible only if payments for the exports are received in Free Foreign Exchange through normal banking channels.|
|The assistance will be provided as per the rates notified in Annexure 3.|
|Procedure for availing assistance||The application can be made by Corporate office/ Registered office / Head office / Branch office or Manufacturing unit. Application for TMA would be filed to the RAs headed by Additional DGFT. Applicant shall have option to choose Jurisdictional RA headed by Additional DGFT on the basis of address of its Corporate office/ Registered office / Head office / Branch office or Manufacturing unit. Jurisdiction of RA headed by Addl. DGFT is specified in Appendix-7(A)B. The option of the RA needs to be exercised while making first application under this scheme. Once an option is exercised, no change would be allowed for further claims under the scheme. The units under SEZs/EOUs/FTWZ shall file applications for TMA to the RAs headed by Additional DGFT in whose geographical jurisdiction address of the applicant falls.|
|Documents required||EP copy of S/B or Airway Bill, Commercial Invoice, self-certified copy of EP Shipping bill(s)/ Airway Bill(s) and Certificate of Chartered Accountant (CA) / Cost and Works Accountant (ICWA)/ Company Secretary (CS) as per Annexure A to ANF-7(A)A.|
DUTY EXEMPTION/REMISSION SCHEMES
This Scheme enables exporters’ duty free import of inputs for export production, including replenishment of input or duty remission.
The Duty Exemption Scheme consists of the following:
|Advance Authorization||Allow duty free import of input, physically incorporated in export product, on the basis of Standard Input Output Norms (SION) or Self Declaration. Minimum 15% value addition is required to be achieved. Period for fulfillment of export obligation is 18 months from the date of issue of Authorization.|
|As per Trade Notice No. 11 dated 30.06.2017 under GST Regime, no exemption from payment of IGST and Compensation Cess would be available for imports under Advance Authorisation. However, as per Notification No. 53 dated 10.01.2019, imports under Advance Authorisation have been exempted from IGST and Compensation Cess till 31.03.2020.|
|Special Advance Authorization Scheme for export of Articles of Apparel & Clothing Accessories has been introduced for duty free import of fabric, subject to the specified conditions.|
|Under Self Ratification Scheme, eligible exporter, on self-declaration and self-ratification basis, can apply for an Advance Authorisation where there is no SION/valid Adhoc Norms for an export product and where SION has been notified but exporter intends to use additional inputs in the manufacturing process.
|Imports under Advance Authorization would now also be exempted from Transition Product Specific Safeguard Duty and Countervailing Duty.|
|Advance Authorization for annual requirements would only be issued for items notified in SION and it shall not be available in cases of adhoc norms.|
|DFIA||Issued to allow duty free import of inputs and is exempted only from payment of Basic Customs Duty. Additional Customs Duty/Excise Duty paid may be adjusted as CENVAT credit. Value addition required 20%.|
|DFIA will be exempted only from payment of Basic Customs Duty and minimum value addition of 20% will be required to be achieved.|
|Duty Free Import Authorization (DFIA) will be issued only on post export basis separately for each SION and each Port and it will not be issued for an export product where SION prescribes ’Actual User’ condition for any input.|
|Exports under DFIA shall be made from a single Port and Regional Authority shall issue transferable DFIA with a validity of 12 months from the date of issue. No further revalidation shall be granted by Regional Authority.|
|Duty Drawback Scheme||The scheme is administered by Department of Revenue which has two components viz-a-viz: All Industry Rate (AIR) and Brand Rate. It comes under Duty Remission Scheme. Under the Scheme, Duty Drawback as per specified rates in Schedule of All Industry Rate of Drawback is granted. Exporter has the option to avail the benefit by getting fixation of Brand Rate on an application in the prescribed format.|
|Rebate on State and Central Taxes and Levies (RoSCTL)||The Scheme was notified by the Ministry of Textiles on 07.03.2019 to be implemented by DGFT. The Scheme will rebate all embedded State and Central Taxes/levies for meant for exports of made-up articles & garments. Under the RoSCTL, the benefit to exporters shall be given by DGFT in the form of transferable duty credit scrips.|
EPCG Scheme allows import of capital goods for pre-production, production and post-production at Zero customs duty. As per Trade Notice No. 11 dated 30.06.2017 under GST Regime, no exemption from payment of IGST and Compensation Cess would be available for imports under EPCG. However, as per Notification No. 57/2015-20 dated 20.03.2019, Capital goods imported under EPCG scheme for physical exports are also exempt from whole of the Integrated Tax and Compensation Cess leviable thereon upto 31st March, 2020.
TOWNS OF EXPORT EXCELLENCE (TEE)
Selected towns producing goods of Rs. 750 crores or more are notified as TEE on potential for growth in exports and provide financial assistance under MAI Scheme to recognized Associations.
INTEREST EQUALIZATION SCHEME
The Government announced the Interest Equalisation Scheme @ 3% per annum for Pre and Post Shipment Rupee Export Credit with effect from 1st April, 2015 for 5 years available to all exports under 416 tariff lines [at ITC (HS) code of 4 digits] and exports made by Micro, Small & Medium Enterprises (MSMEs) across all ITC(HS) codes. With effect from November 2, 2018, the rate of Interest Equalisation for MSME has been increased to 5%. The Scheme has also been extended to Merchant Exporters who can avail the benefit @ 3% for all exports under 416 tariff lines w.e.f. January 2, 2019.
GOLD CARD SCHEME
The Gold Card Scheme was introduced by the RBI in the year 2004. The Scheme provides for a credit limit for three years, automatic renewal of credit limit, additional 20% limit to meet sudden need of exports on account of additional orders, priority in PCFC, lower charge schedule and fee structure in respect of services provided by Banks, relaxed norms for security and collateral etc. A Gold Card under the Scheme may be issued to all eligible exporters including those in the small and medium sectors who satisfy the pre-requisite conditions laid by individual Banks.
TRANSPORT AND MARKETING ASSISTANCE FOR SPECIFIED AGRICULTURE PRODUCTS SCHEME
(TMA) scheme aims to provide assistance for the international component of freight and marketing as well as to mitigate disadvantage of higher cost of transportation of export of specified agriculture products to specified destinations/countries due to trans-shipment and to promote brand recognition for Indian agricultural products in the specified region.
Facilities like 24X7 customs clearance, single window, self – assessment of customs duty, prior filing facility of Bill of Entry etc. are available to facilitate exports.
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