India has implemented different frameworks from time to time for the promotion of import-export services. Export Promotion Capital Goods (EPCG), Duty Drawback, Export Oriented Units (EOU), Special Economic Zones (SEZ), etc., are some of the structures. These schemes concentrate mainly on the rebate or repayment of the various taxes or duties applicable to exporters.
These export promotion schemes aim to neutralize the incidence of taxes based on the cardinal principle of trade, which is globally recognized: “Goods and services may be exported, but taxes should not be exported. We at Digital Exim – A leading organization that also runs an import-export course in Ahmedabad, brought you the major 5 differences between MEIS and Export –Import’s RoDTEP scheme.
There have been several questions about the new regime in the industry, RoDTEP (Remission of Duties and Taxes on Exported Products), which will replace MEIS (Merchandise Exports Incentive Scheme). If you also want to learn the basic and advanced fundamentals of import-export services, you can join our import-export training classes.
A Brief about RoDTEP
Remission of duties and taxes on export products (RoDTEP) The Remission of Duties and Taxes on Export Products (RoDTEP) is a policy introduced by the GOI for the promotion of import-export services by way of reimbursement of duties and taxes which, in practice, are not exempted or rebated under any other scheme.
“Refund currently un-refunded” is the principle. The system was proposed to replace two related schemes aimed at promoting exports. These schemes are RoSCTL and MEIS. This new system is a synthesis of the characteristics of both systems.
GST and import/customs duty are currently refunded or rebated by schemes such as Advance authorization, Duty Drawback, etc., on inputs needed to produce exported goods. But there are taxes, duties, or levies in the federal, central, or local levels imposed in the purchase and distribution of export goods but are not generally excluded or remitted under any other scheme.
The goal of RoDTEP is to cover all of these responsibilities and taxes. The goal is to refund the embedded duties and taxes through the electronic customs ledger in a duty credit / electronic script. Find the exclusive import export course in Ahmedabad and become a master of the field.
A Brief about MEIS
The Merchandise Export Incentive Scheme (MEIS) goal was also to improve exports through the provision of incentives and rewards. It is part of India’s 2015-2020 foreign trade agenda.
Under this structure, exporters were given certain incentives and rewards through the ‘Service Credit Script’ (transferable).
Product-to-product and country-to-country depended on the defined rates at which the rewards were to be offered. It was not a tax neutralization program but rather focused on providing exporters with incentives or rewards to fix infrastructural insufficiencies and related costs.
The Ministry of Textiles was notified on 7 March 2019, of the RoSCTL (Rebate on State and Central Taxes and Levies). It was supposed to refund various state and central taxes/levies on apparel and made-up exports. This program was a substitution for the old Refund of State Levies scheme.
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5 Major differences between these two import-export services (MEIS vs. RoDTEP)
|1||Percentage of Incentive||2 % to 5 % of Freight on Board value of Export||Product-based percentage incentive system- This is estimated to be lower than the current MEIS (rates to be declared later)|
|2||Compliance with WTO||It does not comply with WTO trade regulations.||It complies with WTO trade regulation.|
|3||Issuance||In the form of scripts that are transferable.||In the form of an electronic script/transferable duty credit stored in an electronic ledger.|
|4||Incentive Scheme||Additional benefits for the sale of goods other than the other reimbursements and disadvantages applicable to the undertaking regarding those exports.||Any established scheme does not currently reimburse the effect of indirect taxes on goods used in manufacturing the exported commodity.|
|5||Transferability||Freely Transferable||Freely Transferable|
The RoDTEP system was necessary for the moment. The Indian manufacturing exporters and merchandise industry need financial backing and an adequate climate to sustain cost competitiveness in the global arena after being affected by COVID-19. Also, being a signatory of WTO, India was required to comply with its global trade norms.
You can find many import-export courses in Ahmedabad, but at Digital Exim, we not just run the service of import-export training classes; we can help you set up the entire business of import-export services.
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One thought on “5 Major Differences between MEIS and RoDTEP Scheme of Export-Import”
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