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Longer wait time awaits exporters seeking RoDTEP benefits
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SME Times News Bureau | 19 Mar, 2021
Exporters will have to wait longer to get incentives under the new
Remission of Duties and Taxes on Export Products (RoDTEP) scheme.
Sources
privy to the development said differences between the Commerce and
Finance Ministries over the quantum of benefits to be released under the
scheme is expected to delay finalisation of refund rates for various
product categories, affecting finalisation of contracts by exporters.
The
new scheme, which replaced the MEIS (Merchandise Exports from India
Scheme), is applicable with effect from January 1, 2021. But in absence
of rate of benefits finalised by the Commerce Ministry, exporters
continue to remain in dark, resulting in delays in also a few export
bound shipments, said some exporters who did not want to be named.
Sources
said that the G.K. Pillai panel set to finalise rates under the scheme
for thousands of products has suggested a design that may raise annual
RoDTEP benefits to the tune of Rs 30,000 crore. The Finance Ministry,
sources said, wants the annual benefits to be capped at around Rs
13,000-15,000 crore. This has prevented the Commerce Ministry from
finalising the scheme as comments from the Revenue Department had not
yet been received.
The government has budgeted only Rs 13,000
crore for the RoDTEP scheme for FY22, which is way below the scheme's
initial estimated annual cost of Rs 50,000 crore. Also, it is only a
third of the Rs 39,097 crore the government approved for exporters in
FY20 under the MEIS for many sectors.
Industry experts and former
ministry officials said that with the government's focus on
productivity linked incentives (PLIs) and other stimulus measures
announced as part of Atmanirbhar Bharat package, RoDTEP may have to be
operationalised with a smaller budget.
The RoDTEP is designed to
reimburse the input taxes and duties paid by exporters, including
embedded taxes, such as local levies, coal cess, mandi tax, electricity
duties and fuel used for transportation, which are not exempted or
refunded under any other existing scheme.
The scheme was brought about with the intention to boost exports which were relatively poor in volume previously.
A
smaller budget for it would mean that sectors outside the textiles
would be left with little or no benefits. As the reimbursement scheme
for the textiles sector, RoSCTL, will get subsumed in RoDTEP once it is
launched, an estimated outgo of Rs 7,500 crore will have to be set aside
only for it.
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