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What is the primary objective of the RoDTEP scheme introduced by the Government of India?
- a)To encourage imports
- b)To prevent rupee depreciation
- c)To reduce taxes on exports
- d)To promote domestic consumption
Correct answer is option 'C'. Can you explain this answer?
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What is the primary objective of the RoDTEP scheme introduced by the G...
The Government recently extended export benefits under the RoDTEP scheme for one more year.
About Remission of Duties or Taxes on Export Products (RoDTEP) scheme:
- It was introduced by the Government as a duty remission scheme on exports and is being implemented from 1st January 2021.
- It was enforced to repeal and reduce taxes for exported products, thereby encouraging the conditions of exported and increasing the amount of exports in the country.
- The scheme will be administered by the Department of Revenue, Ministry of Finance.
- Tax reimbursement under RODTEP:
- The Scheme provides a mechanism for reimbursement of taxes, duties and levies, which are currently not being refunded under any other mechanism at the central, state and local level but which are incurred by the export entities in the process of manufacture and distribution of exported products.
- This does not only include the direct cost incurred by the exporter but also the prior stage cumulative indirect taxes on goods.
- It is a WTO-compliant scheme and follows the global principle that taxes/duties should not be exported.
- RoDTEP replaced the Merchandise Export Incentive Schemes (MIES), in response to the US challenging the Indian export subsidies under the MEIS at the WTO. When the WTO dispute panel ruled against India, RoDTEP was framed to ensure that India remains WTO-compliant, while also supporting low-volume exports of commodities from India.
- Eligibility:
- It is applicable to all the sectors involved in the export of goods irrespective of their turnover, provided the country of manufacturing of the exported goods should be in India.
- Such an exporter may either be the merchant or manufacturer exporter. However, such goods should have been directly exported by such a person.
- Goods exported through e-commerce platforms are also eligible under this scheme.
- Process of Refund:
- Rebate under the scheme is provided to eligible exporters as a percentage of the freight on board (FOB) value of exports.
- Remission is issued in the form of transferrable e-scrips (type of certificates with some monetary value) maintained in an electronic credit ledger by the CBIC (Central Board of Indirect Taxes and Customs).
- e-scrips can be used for paying basic customs duty on the import of goods or may be transferred electronically to another party.
What is Freight on Board (FOB)?
- Freight on Board (FOB), also referred to as Free on Board, is an international commercial law term published by the International Chamber of Commerce (ICC).
- It indicates the point at which the costs and risks of shipped goods shift from the seller to the buyer.
- The buyer is responsible if the goods are damaged or lost while in transit.
Hence option c is the correct answer.
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What is the primary objective of the RoDTEP scheme introduced by the Government of India?a)To encourage importsb)To prevent rupee depreciationc)To reduce taxes on exportsd)To promote domestic consumptionCorrect answer is option 'C'. Can you explain this answer?
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