The much-awaited tax remission rates under the Remission of Duties or Taxes on Export Products Scheme (“RoDTEP” /”Scheme”) have finally been notified vide  Notification No. 19/2015-20 dated August 17, 2021.  The Notification lays down guidelines, objectives and operating principles for the RoDTEP Scheme along with rate of remission for products covered under 8555 tariff codes.

RoDTEP succeeds Merchandise Exports from India (“MEIS”) Scheme and has been in news for delay, shortfall in the budgetary outlay etc. since the start of the year. It is not surprising that the remission rates are nowhere close to MEIS and the struggle for exporters for a rational rate would only continue.

Post US’s successful challenge of India’s MEIS scheme at WTO, the said scheme is being replaced with RoDTEP – which envisages reimbursement of taxes suffered by export products as opposed to export incentivization as was envisaged under the MEIS scheme. Consequently, the budgetary outlay for the RoDTEP Scheme of around INR 13,000 crores is much smaller than the budgetary outlay for the erstwhile MEIS Scheme of around INR 35,000 to 40,000 crores.

The announcement of the RoDTEP rates on exported products comes in the backdrop of other export schemes such as ‘the Districts as an export hubs scheme’ which are likely to be announced in the near future. As per the Commerce Secretary, Mr. BVR Subrahmanyam, through such incentives and in view of the global trade recovery, India’s exports are expected to record a growth in FY 22 and hit the target of $400 billion. The Government also aims to increase merchandise exports to as high as $1 trillion by FY 28 and service exports to $700 billion.