Export benefits under RoDTEP scheme may be extended beyond Sept 30

Cont’d. from Pg. 3

“Looking at the export prospects and the available budget for the scheme for this fiscal, it seems there will be enough funds available to continuetheRoDTEP schemeforthe chemicals, pharmaceuticals and iron & steel sectors beyond September 30 2023. While the tenure of the extension is yet to be decided, it could be up to six months till the end of the fiscal,” an official tracking the matter saidrecently.

However, the Government is unlikely to extend the scheme for the identifiedsectorsinperpetuity,likeall other sectors covered under the scheme,asfundingmaybeanissueat any time in the future, the official explained.

The RoDTEP scheme refunds exporters the embedded duties/taxes that are not rebated under other schemes. These include VAT on fuel used in transportation, mandi tax and duty on electricity used during manufacturing. As the scheme refunds input taxes that are calculated transparently, it complies withWTOnorms.

When the scheme was announced inJanuary2021,itcovered8,731items from most export sectors except for organic and inorganic chemicals, pharmaceuticals and iron & steel, which covered most engineering items.However,theGovernmentlater decided to extend the scheme to the excluded sectors as well, which expanded the list of eligible items to 10,342, per DGFT figures. However, the benefits were extended only for the December 2022-September 30, 2023period.

“Since the chemicals, pharma and iron & steel items account for a large chunkofIndia’sexports,theRoDTEP payout to these would also be substantial. That is why the Government may want to have the flexibility of extending the benefit of the scheme to these sectors when there is enough fund available and withdraw it when finances are an issue,”theofficialexplained.

Allocation for the RoDTEP scheme in FY 2023 was increased by 10 per cent to Rs 15,069 crore, from Rs 13,699 crore in 2022-23. Exports in April 2023, on the other hand, declined by 12.7 per cent to $34.66 billion as recessionary trends in many Western economies and Russia’s continued war in Ukraine madean`activeimpact’.

“As export of goods is slowing down, claims for RoDTEP are not likely to rise significantly this year as they are directly linked to the exports carried out. So, the Commerce Department is unlikely to over-spend the allocation made under the scheme even if is extended to the identified sectors beyond September 30,”theofficialsaid.