- Merchandise Exports from India Scheme (MEIS) was introduced under Foreign Trade Policy of India (FTP 2015-20), as a part of Exports from India Scheme.
- The scheme provides incentive in the form of duty credit scrip to exporters to compensate for their losses on payment of duties. The scrips can be transferred or used for payment of a number of duties.
- In 2019, a World Trade Organization (WTO) dispute resolution panel ruled that MEIS was not in compliance with the global trade norms.
- Additionally, many exporters had persistently complained that the MEIS scheme doesn’t offset all the taxes.
- To address these issues, the government has introduced the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme with a view to give a boost to the country’s outbound shipments. It was introduced in 2021.
- This new scheme reimburses currently un-refunded Central, State, and Local taxes and duties incurred in the process of manufacture and distribution of exported products in a way that is compliant with the WTO norms.
- It aims to provide a level playing field to domestic industry abroad.
- Major components of taxes covered are electricity duty, value-added tax (VAT) on fuels used in transportation/ distribution, mandi tax, stamp duty, etc.
- It may be noted that rebate under the Scheme shall not be available in respect of duties and taxes already exempted or remitted or credited.
- RoDTEP has created a mechanism to reimburse such central, state and local taxes, which are not being refunded under any other scheme. The refund would be credited to an exporter’s ledger account with the customs, and will be used to pay basic customs duty on imported goods.
- The credits can also be transferred to other importers.
Why in News?
- The Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) support which was notified till 30th September 2023 is now being extended till 30th June 2024.