The government proposes to roll out the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme next month replacing popular Merchandise Exports from India Scheme. Remission rates suggested by the industry are higher than the incentives under MEIS, payable as a percentage of realised free-on-board value of 2%, 3% and 5%.
MEIS is being replaced by RoDTEP as the former violates the global trade norms. The RoDTEP committee, headed by Pillai, was constituted in July to formulate the modalities to calculate taxes at the central, state and local levels imposed on the exported products 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 carpet industry has suggested a RoDTEP rate of 8%, the apparel export sector has suggested 6-6.5%, while the range for leather goods is 1.6-6% and the handicrafts sector has sought a 5-7% benefit rate. The aluminium industry has sought a tax refund rate of 12-13%.
“Not all sectors may get the benefits immediately. The committee has sought clarifications on the rates suggested by various sectors as they have to verify the rates,” said A Sakthivel, chairman, Apparel Export Promotion Council.
As per a representative of the Council for Leather Exports, the panel has asked various export promotion councils on how they arrived at the rates. A meeting on the issue was held last week in the finance ministry.
“The drawback committee has been meeting regularly. We will notify the rates they finalise. As of now, it doesn’t look as if MEIS will get extended,” said an official aware of the details. India’s exports fell 8.74% in November, steeper than the 5.12% dip in October, at $23.52 billion with the trade deficit touching a 10-month high of $9.87 billion.