Statutory Audit – January 2023

RoDTEP Scheme

RoDTEP stands for Remission of Duties and Taxes on Export Products. It is a new scheme that is applicable with effect from January 1st, 2021, formed to replace the existing MEIS (Merchandise Exports from India Scheme). The scheme will ensure that the exporters receive the refunds on the embedded taxes and duties previously non-recoverable. The scheme was brought about with the intention to boost exports which were relatively poor in volume previously.

The following were some of the export subsidy programmes recommended to be withdrawn:-

Merchandise Exports from India Scheme

Export Oriented Units Scheme

Electronics Hardware Technology Parks Scheme

Bio-Technology Parks Scheme

Export Promotion Capital Goods Scheme

Special Economic Zones (SEZ) Scheme

Duty-Free Imports for Exporters Schem

 

Features of the RoDTEP Scheme

• Refund of the previously non-refundable duties and taxes

Mandi tax, VAT, Coal cess, Central Excise duty on fuel etc. will now be refunded under this particular scheme. All the items under the MEIS and the RoSTCL (Rebate of State and Central Taxes and Levies) are now under the purview of the RoDTEP Scheme.

• Automated system of credit

The refund will be issued in the form of transferable electronic scrips. These duty credits will be maintained and tracked through an electronic ledger.

• Quick verification through digitisation

Through the introduction of the digital platform, the clearance happens at a much faster rate. Verification of the records of the exporters will be done with the help of an IT-based risk management system to ensure speed and accuracy of transaction processing.

• Multi-sector scheme

Under RoDTEP, all sectors, including the textiles sector, are covered, so as to ensure uniformity across all areas. Additionally, a dedicated committee will be set up to decide regarding the sequence of introduction of the scheme across the various sectors, what degree of benefit is to be extended to each sector, and such related matters.

Eligibility to obtain benefits of the RoDTEP Scheme

• All sectors, including the textiles sector, may enjoy the benefits of the RoDTEP Scheme. Labor-intensive sectors that enjoy benefits under the MEIS Scheme will be given a priority.

• Manufacturer exporters and merchant exporters (traders) are both eligible for the benefits of this scheme.

• There is no particular turnover threshold to claim the RoDTEP.

• Re-exported products are not eligible under this scheme.

• To be eligible to avail the benefits of this scheme, the exported products need to have the country of origin as India.

• Special Economic Zone Units and Export Oriented Units are also eligible to claim the benefits under this scheme.

• Where goods have been exported via courier through e-commerce platforms, RoDTEP scheme applies to them as well.

MEIS vs RoDTEP

MEIS	RoDTEP
1. Incentives available on the export of goods	1. Refund of duties and taxes that are currently not being reimbursed by any other schemes.
2. Not compliant with the WTO norms.	2. Compliant with the WTO norms.
3. 2%-5% of the FOB (Free On Board) value of exports.	3. Product based % is yet to be notified
4. Issued in the form of physical transferable scrips.	4. Issued in the form of transferable duty credit or electronic scrips  which will be maintained via an electronic ledger.

Treatment in Financials

It will be fully digitalized and it will be in the form of transferable Duty Credit/Electronic E-Scripts which will be maintained in an Electronic Ledger by the CBIC. The Company should make its accounting policy as per AS -13 /AS-9 or Ind AS 20/Ind AS 115 and keep record reconciliation of scripts received or to  be received.