The Department of Commerce (DoC) has recommended increasing the budget of the Remission of Duties and Taxes on Export Products (RoDTEP) scheme to ₹20,000 crore to cover all 11,310 tariff lines and allay any legal concerns that it is a mere replacement of the WTO non-compliant Merchandise Export Incentive Scheme (MEIS).
The Department of Revenue had set the annual financial outlay at ₹13,000 crore to include 7,910 tariff items, which were covered under MEIS. But DoC suggested that such a move will give an impression that RoDTEP is just a re-instrumentation of the MEIS.
“This risks RoDTEP scheme being dragged to the World-Trade Organisation (WTO) ab-initio,” the department wrote in its recommendations to the committee of secretaries for RoDTEP, accessed by ET.
Limiting the outgo of the scheme to ₹13,000 crore would have required either imposition of cap per exporter per annum, as was done under MEIS last year, or exclusion of certain sectors or scaling down the remission rates. A cabinet note is likely to be floated this week and the final announcement may be made in 15 days, people close to the matter told ET.
DoC has suggested increasing the financial outlay by ₹7000 crore will provide benefits to all the 11,310 harmonised system (HS) code lines including companies approved under the Production-Linked Incentive (PLI) scheme, advance authorisation beneficiaries, special economic zones and export-oriented units without putting a large fiscal pressure on the government. HS is a code assigned for every single item which is traded, from components to finished goods.
This would fully delink RoDTEP with MEIS and allay any legal and technical concerns that trading partners may have.
( Originally published on Jun 15, 2021 )