Government Forms Committee to Review Export Incentive Schemes RoDTEP and RoSCTL Rates

The government has constituted a special committee, headed by former secretary Neeraj Kumar Gupta, to re-evaluate the notified rates for two crucial export incentive schemes: the Remission of Duties and Taxes on Exported Products (RoDTEP) and the Rebate of State and Central Taxes and Levies (RoSCTL).

The RoDTEP scheme aims to refund taxes, duties, and levies incurred by exporters during the manufacturing and distribution of goods, which are not reimbursed through other mechanisms. This scheme has been extended until March 2026, with current rates varying between 0.3% and 4.3%.

The RoSCTL scheme, introduced in 2021, specifically targets garment exporters, offering them a rebate on central and state taxes for their outward shipments. The maximum rebate under this scheme is 6.05% for apparel and up to 8.2% for made-up textile products.

The committee includes SR Baruah and Vivek Ranjan as members and will consult with administrative ministries, export promotion councils, trade bodies, and other stakeholders to gather views on the current rates. It will determine methodologies for calculating indirect taxes and levies at all levels (Central, State, and Local) borne on exported products, including prior-stage taxes on inputs.

Finally, the committee will recommend appropriate ceiling rates for both RoDTEP and RoSCTL schemes for exports originating from domestic tariff areas, Special Economic Zones, and under Advance Authorisation.

Impact: This review can significantly affect the profitability and global competitiveness of Indian exporters. Changes in RoDTEP and RoSCTL rates could either boost export volumes by reducing costs or potentially make Indian goods less competitive if rates are lowered. A positive adjustment could lead to increased export earnings and help manage the trade deficit. The impact on affected export-oriented companies could be substantial. Rating: 7/10

Difficult Terms Explained: Remission of Duties and Taxes on Exported Products (RoDTEP): A scheme that reimburses exporters for indirect taxes and duties paid on inputs used for manufacturing exported goods, which are not covered by other refund mechanisms. Rebate of State and Central Taxes and Levies (RoSCTL): A specific rebate scheme for the textile and garment export sector, providing refunds for state and central taxes and levies paid on exported products. Export Promotion Councils: Industry-led organizations that promote exports from India. Trade Bodies: Associations that represent the interests of businesses in a particular sector or region. Domestic Tariff Areas (DTA): Areas within India that are not designated as Special Economic Zones. Special Economic Zones (SEZ): Designated geographical areas within a country treated as a territory of foreign country for trade operations, duties, and tariffs, aimed at boosting exports. Advance Authorisation: An export promotion scheme that permits duty-free import of inputs required for export production. Cumulative Indirect Taxes: Taxes levied at various stages of production and distribution that are indirectly borne by the final consumer or exporter.