New remission of duty scheme is approved by CCEA
The Cabinet Committee on Economic Affairs (CCEA) approved a new Remission of Duties or Taxes on Export Products (RoDTEP) scheme that will reimburse central and state taxes, duties and cess on petroleum products and electricity and levies, other than the goods and services tax (GST) that are embedded in the value of the export.
The government thinks that the new WTO-compliant scheme, which will replace the Merchandise Exports from India Scheme, will help boost exports that have been cooled down for a while. The best way to help exporters is to bring all indirect taxes under GST, so that exporters who have paid taxes in the value chain ending in export would have to claim a refund. It is more efficient than reimbursements under the new scheme that involves setting up a committee to fix the rates.
Refunds under the new scheme will be in the form of a transferable duty credit or electronic scrip to be issued to exporters. VAT and other tax on fuel which is used in transportation, mandi tax, duty on electricity used during manufacturing would be covered for reimbursement. This move is in synchronisation with the general rule that countries export goods and services, not taxes.