The government is all set to notify the new duty refund scheme for exporters — Refund of Duties and Taxes on Exported Products (RoDTEP) — this week. The scheme is now waiting for a final clearance from commerce and industry minister Piyush Goyal that is expected in a day or two.
The scheme was implemented in January and meant to replace World Trade Organization (WTO) non-compliant incentives.
The exporters are yet to receive the dues for taxes paid by them for the last eight months.
A notification will provide a respite to them from their long wait, which has increased their fund requirement as the Centre has held back their claims.
The wait has been due to the fact that the commerce and finance ministries agreed to broaden the scope of the scheme to include all products, which led to additional paperwork that is yet to be completed. This also called for higher budgetary allocation, as the two ministries had earlier agreed to increase the allocation from the originally allocated INR 13,000 crore to INR 17,000 crore.
The government is yet to pay huge sums to the exporters from three schemes.
Industry estimates reveal that the government owes around INR 8,000 crore to exporters in unpaid RoDTEP bills, with another INR 3,500-4,000 crore arrears on account of RoSCTL.
In addition to that, an approximate amount of INR 16,000 crore of payments from the now defunct Merchandise Exports from India Scheme (MEIS) are due for April-December 2020. Thus,exporters are demanding payments of close to INR 28,000 crore just from these three schemes.
Another primary complaint by the exporters is that the government is yet to release tax refunds and arrears from earlier schemes such as Service Exports from India Scheme (SEIS) and MEIS that were left off after the US dragged India to the WTO, saying that they were not compliant with global trade rules.
Government sources have shared that refunds could be beneficial at a time when costs such as those on fuel and freight have skyrocketed due to global as well as domestic price dynamics.
Last week, the government had notified the Rebate of State and Central Taxes and Levies (RoSCTL) scheme, a similar mechanism, to allow textile exporters to receive a rebate on central and state taxes till March, 2024.