Duty remission scheme for exporters may be extended beyond September

NEW DELHI : Central Government is likely to extend the expanded duty remission scheme for exporters beyond the September deadline, providing relief to the pharmaceuticals,steelandchemicals sectors,saidofficials.

The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme was expanded in December last year to include pharmaceuticals, chemicals and selectsteelproducts.

The Commerce Department had stipulated that the additional products would be eligible for tax refundsuptoSeptember30,2023.The department wanted to gauge if it had adequatebudgetaryoutlaytofundthe tax remission for the full financial year2023-24.

The Government now feels the budgetary allocation would be sufficient for the entire 2023-24, accordingtoofficials.

“Currently, the monthly refund claims under the RoDTEP scheme are about Rs. 1,200 crore. So, the budgetedallocationofRs.15,069crore forFY24shouldbeenoughtocontinue to extend this benefit to the sectors that were included later,” a senior officialtold.

However, if the Department decidestofurtherexpandthescheme and include the entire iron and steel segment, it will require an additional Rs 1,000 crore for this fiscal, said the official.

In 2022-23, the Government had disbursed Rs. 13,699 crore through thescheme.

The Government will review the scheme before September 30 and notifyitsdecision,saidtheofficial.

Launched on January 1, 2021, the scheme refunds central, state and local levies incurred in the manufacture and export of products not covered by any other incentive scheme.

The move will help exporters of these goods as they compete for orders amid a demand slowdown in key developed markets. Exports of chemicals and pharmaceuticals, and select steel products, totalled $61 billion until February last fiscal year, constituting about 15% of the overall merchandisedespatches,showedthe officialdata.

The Foreign Trade Policy 2023 announced last week flagged timely tax remission for exporters, as it seeks to move away from any incentive-based regime. The RoDTEP scheme is compliant with the World Trade Organization (WTO) norms.

The expanded RoDTEP scheme covers10,342exportproducts,against 8,731 earlier. The scheme is based on the globally accepted principle that exports can be exempt from taxes, andleviesimposedcanberefunded.

Expertsseetheremissionscheme as critical to improving the country’s export competitiveness and achieving the $1 trillion merchandise exporttargetby2030from$447billion in2022-23.

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