RODTEP (Syllabus: GS Paper 3 – Economy)

Context: The department of commerce has reportedly asked for an extension of the RoDTEP scheme for exporters, beyond September 2024.

RoDTEP (Remission of Duties and Taxes on Export Products)

• About: It is one of the basic tenets of global trade that countries can opt for “zero-rating” their exports.
• Implementation: 1st January 2021
• Validity: September 2024
• Objectives:

oOffset the hidden taxes and duties borne by exporters which are not refundable through other mechanisms,

oMake Indian exports more competitive in the global market,

oComply with WTO norms by replacing the Merchandise Exports from India Scheme (MEIS), which was facing challenges in terms of WTO compliance.

• Applicability of the Scheme: Exports to all countries, 

oHowever, there are some sectors such as iron and steel, glass and glass products, apparel and madeups (covered by Rebate of State and Central Taxes and Levies), etc., which have not been given benefit under this scheme.

RoDTEP vs MEIS

• MEIS WAS A promotional scheme to encourage exports of certain thrust sectors whereas RoDTEP is a duty remission scheme, compliant with the norms of WTO. 
• The objective of the MEIS was to incentivise the export of the goods whereas the objective of RoDTEP is neutralise the taxes and duties suffered on exported goods which are otherwise not remitted in any manner.