Duty credit will be issued in lieu of exemption of any duty or tax or levy leviable on any material used in the manufacture or processing of goods for export.
The Finance Ministry has notified the procedure for issuance of duty credit for the goods exported under the tax refund scheme Remission of Duties and Tax on Exported Products (RODTEP).
In August this year, rates for 8,555 products such as marine, agricultural, leather, gems and jewelery were announced under the RoDTEP scheme.
The value of the goods for computing the duty credit to be allowed under the scheme is up to 1.5 times the declared export FOB (Freight On Board) value or the market value of that commodity, whichever is less, said the notification of the Department of Revenue.
Duty credit shall be issued in lieu of exemption of any duty or tax or levy which is chargeable on any material used in the manufacture or processing of goods for export, and where such tax is charged under any other scheme. Not discounted, remitted or credited, it added.
“The Central Government hereby notifies the manner in which duty credit is issued for the goods exported under the Scheme for Remission of Duties and Taxes on Export Products … subject to such conditions and restrictions,” the notification said.
The government has set aside ₹12,454 crore for refunds under the scheme for the current financial year. Under this, various central and state duties, taxes, and duties levied on input products, among others, will be refunded to the exporters.
It also said that duty credit for exports made to Nepal, Bhutan and Myanmar under the scheme would be allowed only if the credit is irrevocable in freely convertible currency established by importers in these countries in favor of Indian exporters for value. The sale proceeds should be recovered against the letters. of such goods.
It said that the Principal Commissioner of Customs or the Commissioner of Customs may, after investigation, pass an order for the duty credit or cancellation of the e-scrip, if an exporter contravenes any provision of the law.
“Where for any reason, duty credit has been allowed in excess of what the exporter is entitled to, the exporter shall pay the amount in excess of such permission, either himself or on demand by the proper officer, along with interest…,” it notes. did.
Tanushree Roy, Director- Indirect Taxes, Nangia Andersen LLP, said that RoDTEP comes as a big relief to exporters as it will boost their working capital management as well as make Indian exports more competitive- Along with this, India’s exports will also get a boost.
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