Topics Covered: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
Remission of Duties and Taxes on Export Products (RODTEP) scheme:
Context:
The notification of benefit rates payable to exporters under the Remission of Duties and Taxes on Export Products (RODTEP) scheme, is expected to take more time as it is facing ‘teething issues.
What are the issues?
- Exporters fear the rates may turn out to be lower than recommended by a technical committee.
- Inadequate remission of taxes would result in residual embedded taxes in export products and hit Indian industry’s competitiveness in world markets at a time shipments are witnessing a nascent recovery, they warn.
Indian exporters are already struggling with volatility in demand from many key markets like the US and EU in the aftermath of the pandemic.
About the scheme:
The scheme was announced in 2020 as a replacement for the Merchandise Export from India Scheme (MEIS), which was not compliant with the rules of the World Trade Organisation.
The scheme would refund to exporters the embedded central, state and local duties or taxes that were so far not being rebated or refunded and were, therefore, placing India’s exports at a disadvantage.
Significance:
- Indian exporters will be able to meet the international standards for exports as affordable testing and certification will be made available to exporters within the country instead of relying on international organizations.
- Also under it, tax assessment is set to become fully automatic for exporters. Businesses will get access to their refunds for GST via an automatic refund-route.
- This would increase the economy for the country and working capital for the enterprise.
Sources: the Hindu.
