Merchandise Exports From India Scheme (MEIS) was launched by the Government in 2015 under foreign trade policy 2015-20 to offset infrastructure inefficiency involved in the export process by providing an incentive of 2% to 5% on FOB value of exports in the form of transferable duty credit scrip which can be used to pay a customs duty or can be sold in the open market at a discounted rate of the face value of scrip.
The introduction of RoDTEP scheme was India’s reaction to the increasing international pressure on export incentives provided by the Indian Government, the US was very vocal and continuously urging the discontinuation of export incentives Like MEIS which is not as per the WTO norms, they also objected to EOU/EHTP/EPCG/SEZ/DFIA Schemes.
Implementation of the RoDTEP Scheme will be done in a phased manner which means when the RoDTEP rate will be announced for the few products then the MEIS rate will be discontinued for those products, RoDTEP aims to reimburse the taxes and duties incurred by the exporters such as local taxes, Coal cess, Mandi tax, electricity duties and the fuel used for transportation which is not refunded under any of existing scheme.
The Committee which has been set up by the Finance Ministry will be headed by the Home Secretary GK Pillai for the determination of benefit rates under RoDTEP.
There are other two members in committee –
Y.G. Parande – Former Central Board of Indirect Taxes and Customs (CBIC)
Gautam Ray – Former Chief Commissioner of Customs and Central Excise
The committee will interact with export promotion councils (EPCs), Commodity/trade bodies, and administrative ministries for taking their views to fix up the ceiling rates under RoDTEP Scheme.
The Committee will perform the following functions –
- They will work out for the calculation of duties, levies, and charges at local, state, and central levels borne on exported goods followed by the calculation of prior stage cumulative Indirect taxes on goods and services used in the production of the exported product,
- The committee will prepare the report of rates under RoDTEP scheme for sectors and items identified by the Government,
- The committee will determine the methodology,
- Will decide modalities of holding meetings,
- Conduct field visits,
- Study the specific production process for suggesting the ceiling rates.
The panel will submit the report to the Ministry within 3 months from the identification and prioritization of sectors and items by the Government. The supplementary report will be submitted in two months after the main report.