The Department of Commerce has notified the rate under RoDTEP scheme on 17th August 2021 vide Notification No. 19/2015-20 & the rates Schedule Appendix 4R. 

Let’s understand the basics of this Scheme. 

WHY Remission of Duties or Taxes on Export Products (RoDTEP) scheme has been introduced?

The basis on a complaint, it has been found that the earlier existed MEIS which is to provide rewards to exporters to offset infrastructural inefficiencies and associated costs were incompatible with the WTO rules. Hence after due deliberations, the Hon’ble Govt of India has discontinued the MEIS with effect from 31st December 2020.

However, Govt was under pressure to bring an alternative scheme which is WTO complaint to promote exports. Hence, after all, due care Govt has introduced a new scheme called Remission of Duties or Taxes on Export Products (popularly known as “RoDTEP”).  The new scheme was approved by Union Cabinet on 13th March 2020 and made effective from 01st January 2021. Under the new scheme, the embedded Central, State and Local duties or taxes will get refunded and credited in an exporter’s ledger account with Customs. 

What are the primary objectives of RoDTEP?

RoDTEP objective is to reimburse the unreimbursed taxes and duties incurred by exporters in the process of manufacturing including units/materials/consumables used in manufacturing. However, such taxes shall not be exempted/ reimbursed by any other scheme. The reimbursement includes

  1. The duty levied by the state on electricity used for manufacturing
  2. Central & state taxes on the fuel (Petrol, Diesel, CNG, PNG, and coal cess, etc) used for transportation of export products
  3. Toll tax & stamp duty on Import-Export documentation
  4. Local taxes
  5. Coal cess
  6. All embedded taxes
  7. Mandi tax levied by APMC’s etc 

What is the Amount eligible for Refund? 

Under the Scheme, A rebate would be granted to eligible exporters at a notified rate as

  1. percentage of FOB value, or
  2. with a value cap per unit, or
  3. Specific Rate per unit of Export Product notified at 8 digits HSN code.

If my indirect taxes paid is higher compared to the actual rate fixed by the committee. What is the way out to get a higher rate of rebate?

As of now, there is no such option to avail special rate of rebate or rebate on actual cost. The exporter needs to avail of the benefit under the notified class only at a predetermined rate. 

Is benefit available for goods as well service?

It is very much clear that it is a rebate on the export of products. So, exports of services are not eligible for the benefit. However, any person who has a composite of both goods and services can avail the benefit of the export of goods. 

Is manufacturing shall be part of the Export compulsorily?

No. The benefit is given to all the exporters of products manufactured in India. It's not necessarily the exporter required to be a manufacturer. 

Will rebate be credited to Bank Account?

No. It will be fully digitalized and it will be in the form of transferable Duty Credit/Electronic E-Scripts which will be maintained in an Electronic Ledger by the CBIC. 

How can it be used?

It can be used for payment of Basic Customs duty or you can transfer electronically to any other person. 

The realization of Sale Proceeds is a stopping point?

The rebate allowed is subject to the receipt of the sale proceeds within the time allowed under FEMA. The non-realization of sale proceeds within the stipulated time will deemed be as a rebate is never had been allowed. However, it is also to be noted that there are no restrictions on the realization of the amount in INR and the exporters can claim the benefit of the Scheme.

How to avail the Benefit?

Detailed rules/guidelines on procedural compliance are yet to be issued by the Authority. 

Who is excluded from the Benefit (Ineligibility)?

Several category products are kept outside the purview of the RoDTEP scheme. They are (a) Export of Imported Goods covered under paragraph 2.46 of FTP (b) Exports through Transshipment (c) Products which are restricted/prohibited under Schedule 2 of Export Policy in ITC (HS) (d) Deemed Export (e) Supply of Products manufactured by DTA to SEZ/FTWZ units (f) Products manufactured/exported by 100% EOU/Units of FTZ/SEZ/EPZ (g) Export for which electronic document in ICEGATE EDI has not been generated etc.

Can goods exported under Export Obligation is eligible to avail of the Benefit?

Unfortunately for the time being goods exported under the Export obligation such as Advance Authorization, Special Advance Authorization, and Duty-Free Import Authorization are excluded from availing the benefit. 

Is benefit available to the holder of EPCG Obligation

By the simple reading of the notification, it looks like there is no restriction to avail the benefit by the exporter who is currently meeting his export obligation under the EPCG scheme.

From what date can I claim the benefit?

RoDTEP is effective from 1st January 2021. Hence benefit is also from the same date. 

What will happen if I failed to mention my intention to claim the benefit under the scheme in the bills/invoices raised from 1st Jan till date?

Effective from the 1st January 2021, it is mandatory for the exporters to indicate in their Shipping Bill whether or not they intend to claim RoDTEP benefit on the export items. Currently, no exporter can avail of the benefit, if he missed out to indicate. However once the detailed procedural aspects are notified, the way out can be considered by the exporter including approaching the legal authorities.  

Is the rate of benefit out for all HSN Chapters?

As per the Rate Appendix announced it has been observed that several Chapters such as 1,2,24,25,26,27,28,29,30,31,47,72,73,77 are not included in the Rates Schedule. Hence rates on the excluded chapters can be expected soon. 

Is there any HSN chapter that is Excluded?

HSN Chapters 61, 62, and 63 are not covered under RoDTEP as RoSCTL is available to the same and already notified. 

Is there any Country specific Restriction on Export?

No. Like the MEIS scheme, it does not have any country-specific restrictions. Irrespective of the Country of Export, you can avail of the benefit.

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Who can buy property in India? Can foreigners also buy property in India?

Resident Indians – Like you and me, Resident Indians can acquire (by any mode say, purchase, gift, or inheritance), property anywhere in India, including in Jammu and Kashmir. There may be specific localized restrictions in some States to buy Agricultural or residential properties. Barring this, one can invest in any number of properties, be it residential, commercial, or industrial land and buildings anywhere in India.

Can an NRI or OCI Cardholder acquire property in India?

Non-Resident Indians (NRI) or OCI Cardholders (OCI) can also purchase properties in India. The Foreign Exchange Management Act (FEMA) empowers the Reserve Bank of India (RBI) to frame regulations to prohibit, restrict or regulate the acquisition or transfer of immovable property in India by persons residing outside India.

As per this regulation, an NRI or OCI can acquire immovable property through

  1. Purchase - from anybody, say, builder, developer, resident Indian or NRI or OCI and pay them from their NRO/NRE account or transfer from abroad through normal banking channel or a loan availed from Banks or Financial Institutions in India.
  2. Gift from Resident Indians – from any person who is a Resident in India. He can get a gift from a relative or a friend. But remember, any gift from a non-relative is subject to Income Tax. So, not advisable to get a gift from someone other than a relative. (Who is a relative? Relative as defined in Section 56 of Income Tax Act)
  3. Gift from NRI or OCI - This is also possible. NRI or OCI can acquire property by way of gift from another NRI or OCI Cardholder who is a relative. (Who is a relative? In this case, Relative as defined in Section 2(77) of Companies Act. 'Relative' concerning an individual means husband, wife, brother or sister or any lineal ascendant or descendant of that individual)
  4. Inheritance –
  • by way of inheritance from a person resident in India or
  • by way of inheritance from a person resident outside India if the transferor acquired the property as per FEMA regulations at the time of buying.
  • Can they inherit agricultural land? They can inherit agricultural land, farmhouses, or plantation property.

 Can foreign nationals buy property in India?

1. Jointly with a spouse, who is a foreigner – Mrs. Pamela is a US Citizen, not an NRI or OCI Cardholder, but married Mr. Krishna Iyer, an NRI settled in the US. Can she also acquire property in India? A person resident outside India, not being an NRI or OCI, who is a spouse of an NRI or OCI, may acquire one immovable property (other than agricultural land/ farmhouse/ plantation property), jointly with his/ her NRI/ OCI spouse.

The marriage should have been registered and subsisted for a continuous period of not less than two years immediately preceding the acquisition of such property

2. Foreign Nationals (other than NRI or OCI) living in India can buy property in India.

Buy with RBI permission – The Citizens from the countries namely, Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong, or the Democratic People’s Republic of Korea (DPRK) cannot acquire immovable property in India, without prior approval of RBI. However, they can acquire immovable property by way of lease, not exceeding five years.

Buy without RBI permission – The foreign nationals of other countries (like the USA or UK or Australia) of non-Indian origin residing in India can acquire permitted property in India.

3. Foreign nationals of non-Indian origin residing outside India cannot acquire property in India. (can they inherit? They can, but a rare possibility).

      To illustrate –

  • Ching of Hong Kong residing in Delhi for the last 5 years. He can’t acquire a flat in India without the prior permission of RBI
  • David of Australia is residing in Delhi for the last 5 years. He can acquire a flat in India. No approval from RBI is required
  • Johnson of Canada is residing in Toronto since birth. He can’t acquire property in India   

4. Long-Term Visa holder - A person is a citizen of Afghanistan, Bangladesh, or Pakistan belonging to minority communities in those countries viz., Hindus, Sikhs, Jains, Buddhists, Parsis, and Christians, who are residing in India and have been granted a Long-Term Visa (LTV) by the Central Government may purchase only one residential immovable property in India as a dwelling unit for self-occupation and only one immovable property for self-employment.

Can foreign companies acquire property in India?

  1. Branch office of a foreign company - A Branch or liaison office or a project office of a foreign company can acquire property in India which is necessary for or incidental to carrying on their business (say, office space or a factory). However, the persons from the countries who share a border with India can’t acquire the property without the prior approval of RBI.
  2. A subsidiary of a foreign company in India is considered as a domestic company, allowed to acquire property in India to conduct their business, in similar lines of a branch as mentioned above.

Is there a restriction to buy Agricultural property in India?

An NRI or OCI is not allowed to acquire Agricultural land/plantation property/farmhouse

Can one NRI pay another NRI outside India towards property in India?

Assume an NRI from the US buys a property in Bangalore owned by another NRI living in the US. Can they pay the sale amount in the USA? Not permitted. The sale value has to be routed through banks in India. 

In case you have any more queries, please mail to This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Read: Can OCI cardholders sell property in India without RBI permission?

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