March 26, 2024

RoDTEP benefit is extended to EOU, AA Holders and SEZ Units

RoDTEP (Remission of Duties and Taxes on Exported Products) Scheme was introduced from 1st January, 2021 and it was implemented in place of schemes prevailing earlier such as MEIS (Merchandise Export from India Scheme)/ SEIS (Service Export from India Scheme).

RoDTEP scheme was introduced to provide a lumpsum reimbursement of tax and duties paid in India on goods and services exported out of India. The scheme was introduced to provide a similar benefits to exporter of goods and services.

Earlier benefit of RoDTEP scheme was provided to goods and services exported out of India and no benefit was provided to supplies made to RoDTEP Scheme and

1. Objective of RoDTEP Scheme

As per agreement entered into by the World Trade Organisation (“WTO”) on Subsidies and Countervailing Measures, all countries to agreement are required to prepare their export promotion policies in accordance with provisions of such agreement.
MEIS/SEIS was challenged by the United States before the World Trade Organization (WTO) on grounds that such incentives were inconsistent with certain provisions of such agreements.
As directed by the WTO, India was required to withdraw “subsidies” provided to exporters under the EOU/EHTP/BTP and SEZ scheme as well as EPCG and MEIS Scheme.
Complying with ruling, the MEIS scheme was replaced with a new scheme known as Remission of duties and Taxes on Export Products (RoDTEP) scheme.

2. Features of RoDTEP Scheme

Following are the Key features of RoDTEP Scheme which will benefit the exporters of India:

The RoDTEP scheme aims to provide refunds of all the duties and taxes incurred with respect to exported goods such as Custom Duty, Mandi Tax, electricity duties, taxes paid on fuels etc.
The benefit is provided at the rates notified in accordance with HSN Code as a percentage of FOB value.
For certain categories of items, a fixed amount of rebate is provided per unit.
Through reimbursement of duties and taxes, cost of product shall reduce and Indian product shall become competitive at global level.
Reward is granted in form of duty scripts and the same can be accessed through login on ICEgate .

3. Benefit of RoDTEP Scheme to Advance Authortisation Holders, EOU Units and SEZ Units

Para 4.55 of Foreign Trade Policy, 2023 list down certain categories of exports and exporters which are not eligible for rebate under RoDTEP Scheme.
Out of list, following exports and exporters are also not entitled to claim benefit under RoDTEP Scheme:
- Products manufactured in EHTP and BTP.
- Products manufactured or exported in discharge of export obligation against an Advance Authorisation or Duty Free Import Authorization or Special Advance Authorisation issued under a duty exemption scheme of relevant Foreign Trade Policy.
- Products manufactured or exported by a unit licensed as 100% Export Oriented Unit (EOU);
- Products manufactured or exported by units situated in Free Trade Zones or Export Processing Zones or Special Economic Zones.

Therefore, exporters holding Advances Authorisations, supplies made from EOU and SEZ were not entitled to RoDTEP scheme.
However, vide notification No. 70/2023 Dated 8th March, 2024, Foreign trade policy, the above mentioned entries are deleted from FTP, 2023.
Therefore, these units are also entitled to claim benefits of the RoDTEP Scheme.

4. Rates of benefit and per unit value cap

As per Para 4.59 of FTP, 2023, The Appendix 4R contains the eligible RoDTEP export items, rates and per unit value caps, wherever applicable.
In line with same, For exports of products manufactured by AA holders (except Deemed Exports), EOU and SEZ units, the eligible RoDTEP export items, rates and per unit value caps, wherever applicable, are contained in Appendix 4RE.
Appendix 4RE can be access DGFT portal at https://www.dgft.gov.in/CP/?opt=RoDTEP

5. Period of benefits to AA, SEZ unit and EOU unit of RoDTEP Scheme

As per notification No. 70/2023 Dated 8th March, 2024, the benefit of RoDTEP scheme of products manufactured by Advance Authorisation holders (except Deemed Exports) and Export Oriented Units (EOUs) is available for the period of 11th March, 2024 and 30th September, 2024 only.
The RoDTEP implementation for exports made by SEZ unit is expected to be operational from 1st April, 2024, once the IT integration of SEZ units with Customs Automated System (ICEGATE) takes place.
The implementation period for exports of products manufactured by Free Trade Warehousing Zone or SEZ units shall be from the date of implementation till 30.09.2024 only.
Earlier the benefits were provided till 30th June, 2024 (vide notification number 33/2023 dated 26th September, 2023). However, such benefits are extended till 30th September, 2024.

6. Procedure of claiming benefits under RoDTEP scheme

Following is the procedure of claiming benefit under RoDTEP Scheme:

Declaration on Shipping Bill:
- For the purpose of claiming benefit under the RoDTEP scheme, the exporter is required to make a declaration in the Shipping Bill. With effect from 1st Jan, 2021, it has been made mandatory for all the exporters whether they want to claim benefit of RoDTEP Scheme.
- If exporters do not claim benefit of RoDTEP Scheme in the shipping bill then no benefit shall be provided to him even with respect to eligible goods.

Processing of claim under RoDTEP Scheme
- Upon filing declaration in the Shipping bill, system will automatically compute the reward under the RoDTEP Scheme.
- Upon filing of EGM, the system will send all shipping bills to Risk Management System (“RMS”) and on the basis of Risk based targeting by RMS, all shipping bills with RoDTEP and/or Drawback claim will either go to the officer for processing or will directly be facilitated to scroll queue without any officer intervention.

Claiming of Credits and Generation of Credit Scrips
- Once the RoDTEP scroll is generated, the exporter can convert such scrolls into scripts through login on ICEGATE;
- It is important to note that In case the exporters have not registered on ICEGATE already with their digital signatures, they need to complete the registration in order to avail the benefits of RoDTEP.
- Once the Scrips are generated, the same will reflect in the exporter’s ledger and will be available for utilization in paying eligible duties during imports or for transfer to any other entity having IEC and a valid ICEGATE registration.

Utilisation of Scrips in Imports
- These scrips can be used for the payment of import duties.
- The owner of the scrip (either the original exporter beneficiary or any other person to whom such scrips are transferred on ICEGATE portal) will be able to use the scrip in the Bills of Entry the same way as any other duty credit scrips issued by DGFT, by giving the details in the license table of the Bill of Entry.

DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

Guidelines for Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme

MCA imposed Penalty for failure to issue and transfer shares in Demat form

Others

MCA imposed Penalty for failure to issue and transfer shares in Demat form

As per Section 29(1A) of Companies Act read with Rule 9A of The Companies (Prospectus and Allotment of Securities) Rules, 2014, every unlisted public company shall ensure that before issuance of any securities entire holding of securities of its promoters, directors, key managerial personnel has been dematerialised in accordance with provisions of the Depositories Act 1996. Further, every shareholder of an unlisted public company is required to dematerialise its securities before transfer, if such transfer is made on or after 2nd October, 2018.

23/04/2024 No Comments

Proceedings can’t be initiated under Section 74 when tax liability is already discharged along with interest

Judgements

Proceedings can’t be initiated under Section 74 when tax liability is already discharged along with interest

The petitioner is engaged in the business of generation of electricity through solar plants. The GST returns filed by the petitioner for the period of July, 2017 to March, 2019 were subject to audit. The petitioner was informed about tax liability during audit proceedings on account of wrong availment of ITC and ITC availed with respect to exempted supply. Upon receipt of initial audit observation, the petitioner discharged the entire tax liability alongwith interest. The final audit report was issued much after payment of GST liability. Post audit, the respondent issued show cause notice to the petitioner under Section 74 of CGST Act and confirmed the demand through DRC-07. The petitioner contended that it falls under purview of Section 73(1) and 73(5) of CGST Act and therefore, SCN under section 74 is not sustainable. Whereas, the respondent contended that this is the case of fraud and willful misstatement.

23/04/2024 No Comments

Establishment of Non-SEZ IT/ITES business in IT/ITES Special Economic Zones| Insertion of Rule 11B to SEZ Rules

Information

Establishment of Non-SEZ IT/ITES business in IT/ITES Special Economic Zones| Insertion of Rule 11B to SEZ Rules

Post COVID-19, there are many corporate entities which are allowing employees to work on Complete Work From Home (WFH) basis or on hybrid basis, i.e., Employees are required to come to office on selected days. This approach has reduced occupancy of physical premises by corporate offices and caused vacation of various rented premises.

23/04/2024 No Comments