Business

How is RoDTEP Scheme more beneficial than MEIS?

Understanding what is RoDTEP scheme

Remissions of Duties and Taxes on Exported Products, known as the RoDTEP scheme, is issued by the Government of India to avail Indian exporters with incentives and benefits on taxes. Earlier, the Merchandise Exports from India Scheme (MEIS) was used to serve exporters from India for the purpose of incentives. Now Government of India replaced MEIS with RoDTEP to regulate the refund policy on taxes and duties, which was earlier non-recoverable. With this scheme, exporters will receive refunds for the non-creditable taxes such as fuel tax, stamp duty, electricity tax, and many more applied while trading goods. RoDTEP is imposed to enhance the export business of India and boost sales in the international market.  

Key Features of the RoDTEP Scheme

Reimbursement of the duties and taxes

Earlier, the taxes such as Mandi tax, fuel tax (used while transporting goods), and electricity tax (used while manufacturing the goods) were under the category of non-refundable taxes. Under the RoDTEP scheme, a range of local taxes, all embedded taxes, taxes on fuel (petrol, diesel, CNG, PNG, and coal cess, etc.), taxes on electricity, toll tax, and stamp tax on Import-Export documentation are now covered and reimbursed for exports.  

Automated Credit System

The tax credits are tracked and recorded online. It is generated in the form of transferable electronic scrips.   

Risk Management System

The Internet makes it easy to monitor and verify records of the exporters with a much higher speed than done manually. A proper IT-based Risk Management System with an in-built smart audit mechanism is used to track the records of the exporters and ensure the accuracy of the transaction process.  

One Scheme for All

Under the Rodtep scheme, all sectors of exports such as manufacturers, MSMEs, merchant exporters, and all the industries such as the textile industry, agricultural industry, and jewellery industry can benefit from this program. Most importantly, RoDTEP ensures equality among all areas. There is a proper team set up to regulate the benefits of this scheme across the various sectors and ensure the degree of benefit that needs to be extended to each sector.   

Eligibility criteria for RoDTEP Scheme

  • Priority is given to the sectors that enjoyed the benefits under the MEIS scheme.
  • Manufacturers and Traders both will benefit under RoDTEP.
  • Small and big traders are both eligible for the scheme. There is no margin on the turn-over criteria to claim this scheme.
  • Only products that are originally made in India can avail of this scheme.
  • Special Economic Zone Units and Export Oriented Units are allowed to claim the scheme.
  • RoDTEP scheme also applies to the products that are exported via e-commerce sites.

Major differences between MEIS and RoDTEP

Incentive Structure

Under the MEIS scheme, additional incentive on exports of goods was available. While under the RoDTEP scheme, exporters are entitled to a refund of Indirect taxes and duties embedded on the exported products, which are currently not reimbursed by any of the existing schemes.  

The World Trade Organization (WTO) Compliance

The MEIS is not in compliance with WTO trade norms, and that’s why the RoDTEP scheme was launched, which is in accordance with the WTO guidelines.  

Incentive Percentage Schema

The MEIS incentive was often higher with 2% to 5% of the FOB (Free on Board) value of Exports. In comparison, the RoDTEP incentives are product-based % which is expected to be lesser than MEIS.  

Mode of Issuance

Under MEIS, credits are issued in the form of physical transferable scrips that is a hard copy. While in RoDTEP, credits are issued in the form of transferable electronic scrip, which is maintained through an electronic ledger.   

What is the procedure of availing benefits under the RoDTEP Scheme?

The exporters from India are eligible to avail themselves of the benefits of the RoDTEP scheme. Following are the steps to claim the benefits of the RoDTEP scheme:  

  • Create a user account on ICEGATE.

The ICEGATE portal (Indian Customs Electronic Gateway) will contain insights about the credits benefited by the exporter. At the port, the exporter should demonstrate in the shipping bill the insights about the claim of the RoDTEP benefit concerning a specific commodity and generate a credit scrip for the same. These credit scrips are then utilized to pay customs taxes and refunds.   

  • The next step is to declare the claim for RoDTEP in the shipping bill.
  • Your claim will be processed by the Customs department once the Export General Manifest (EGM) is filed.
  • 5After processing the claim, the shipping bills for the permissible amount will be issued and made available on the user’s account at the ICEGATE portal.
  • Create a RoDTEP credit ledger account on the official ICEGATE website.
  • After creating the RoDTEP credit ledger account, the exporters can log in and generate scrips by selecting the relevant shipping bills.
  • Once the scrips are generated, the exporters can check the refund credited in their ledger account.

Exporting from India through e-commerce sites

Every businessman dream of selling his products in the global market. A vision of establishing an international brand is now made easy through online sites. With the introduction of the RoDTEP scheme for export products through e-commerce, you can also benefit from taxes and duties.   

With Amazon Global Selling, you can reach to international customers and sell your products with ease, irrespective of your business type or size. With just a simple and easy registration process and minimal documents requirement, you can export your products worldwide. With just three steps, you can fulfil your dream of entering into the international markets and competing with the re-owned brands.  

Step 1: Registration on Amazon

You need to create a seller account on Amazon to become a part of the Amazon Global Selling Program. The registration is an online procedure. You’ll need the following documents to register:  

• PAN  

• ID proof (Aadhar, driving license, or passport)  

• Business address proof (Bank statement)  

• Credit card (international transactions enabled)  

Step 2: Listing of products

After registering with Amazon, you can start listing your products. you can list your products in either of the two categories available on the Amazon portal. You can seek help and guidance from the Amazon Service Provider Network to list your items.  

Step 3: Shipment and payments

Shipment is made easy with FBA services, or you can also ship by yourself. Once the order is shipped to the customer, you will receive your payment directly in your bank.   

Staff Writer

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