The benefits under Remission of Duties and Taxes on Exported Products (RoDTEP) will continue beyond September and the government will review the scheme in December, officials said.
“RoDTEP will be reviewed in December and at present, the situation is not conducive to discontinue the scheme,” said an official, who did not wish to be identified.
The scheme aims to refund taxes and duties that are not rebated under any other scheme. These include various central, state and local levies that are incurred in the process of manufacturing and distribution of exported products but are not refunded through schemes such as goods and services tax or duty drawback.
The current RoDTEP benefit rates range between 0.3-4.3%. The budget allocated ₹16,575 crore to the scheme for 2024-25.
As per the commerce and industry ministry, the existing RoDTEP outlay would be insufficient if exports grew at a faster pace. In that case, the outlay of around ₹800 crore of a separate programme, the Rebate of State and Central Taxes and Levies (RoSCTL) scheme for apparel, garments and made-ups, could be used.
Both RoDTEP and RoSCTL are e-scrips issued by customs in respect of remission of embedded local duties in exported goods. “We will take a call after the review if RoDTEP needs to be discontinued or incentives reduced in some sectors if the budget is breached,” the official said.
The ministry has forecast some savings under RoSCTL because textile exports haven’t grown as much and can be accommodated in RoDTEP.
Uncertain export credit
However, the commerce and industry ministry and finance ministry are still discussing the extension of the interest equalisation scheme on pre- and post-shipment rupee export credit which are due to expire at the end of this month. “Talks are not conclusive on the interest equalisation scheme. A notification is expected in a day or two,” the official said.
Exporters have sought an extension of the scheme as goods exports contracted 9.3% in August. The scheme helps exporters from identified sectors and from micro, small and medium enterprises to avail of rupee export credit at competitive rates at a time when the global economy is facing headwinds.
The ministry has moved a note for the approval of the Expenditure Finance Committee to extend by five years the interest equalisation scheme, which is available for small businesses and products falling under 401 tariff codes till September 30. The total outlay for the scheme is capped at ₹750 crore.