28 August 2021, New Delhi: The Government has notified Remission of Duties and Taxes on Exported Products (RoDTEP) scheme guidelines for employment generating agriculture, marine, automobiles, and plastics leather and gems & jewellery on 17th August 2021.
Rates for different sectors range between 0.3%- 4.3% under the incentive scheme that aim to refund exporters duties and taxes’ such as VAT on fuel used in transportation mandi tax and duty on electricity used during manufacturing that were so far not being refunded. The RoDTEP scheme has come into effect from 1st January 2021 but could not implemented due to un availability of rates.
In case of agrochemicals which are mainly covered under chapter 38 the existing rebate has been reduced from 2% (valid till Dec 2020) to 0.8% which includes insecticides, fungicides herbicides, plant growth regulators and rodenticides. In case of Chapter 28&29 on intermediates, the RoDTEP rates have not been announced
This is a major deviation from the earlier MEIS scheme the rebate would be granted as a percentage of FOB value with a value cap, which at present is not applicable on agrochemical products.
“India has been on a growth path for agrochemicals to cross Rs. 30, 000 crore. with exports to 130 countries worldwide. Besides financial negative impact of almost Rs. 450 crorer, it would be a disincentive for both small and large Indian companies. It would be worthwhile to mention that over 90% of exports are made by Indian companies who are CCFI members,” Harish Mehta, senior Advisor, Crop Care Federation of India (CCFI), said.
“We feel that the Ministry of Commerce and Industry would have a relook at this Champion sector which is no way should falter on their export commitments. CCFI is of the view that this rebate should be increased to at least 5% if not more to give a boost to indigenous agrochemical manufacturers and merchant traders. China offers cash incentive subsidy ranging from 13-16% on their agrochemicals exports to India, one of the main reasons for their international presence”
Remission of Duties and Taxes on Exported Products (RoDTEP) scheme is one such reforms, based on the globally accepted principal that taxes and duties should not be exported, and taxes and levies borne on the exported products should be either exempted or remitted to exporters.