To boost exports, the Union cabinet on Friday approved the introduction of "Scheme for Remission of Duties and Taxes on Exported Products".

The decision was taken by the Cabinet Committee on Economic Affairs. The scheme is said to be WTO norms compliant. It is expected to make Indian exports cost competitive and create a level playing field for exporters in international market.

Accordingly, the scheme envisages to create a mechanism for reimbursement of taxes, duties, levies charged by the central, state and local level, which are currently not being refunded under any other mechanism, but which are incurred in the process of manufacture and distribution of exported products.

"This scheme is going to give a boost to the domestic industry and Indian exports providing a level playing field for Indian producers in the international market so that domestic taxes or duties are not exported," an official statement said.

"Under the Scheme an inter-ministerial committee will determine the rates and items for which the reimbursement of taxes and duties would be provided."

At present, GST taxes and import or customs duties for inputs required to manufacture exported products are either exempted or refunded.

However, certain taxes, duties, levies are outside GST, and are not refunded for exports, such as VAT on fuel used in transportation, 'Mandi tax, Duty on electricity used during manufacturing.

"These would be covered for reimbursement under the RoDTEP Scheme," the statement said.

"The sequence of introduction of the Scheme across sectors, prioritisation of the sectors to be covered, degree of benefit to be given on various items within the rates set by the Committee will be decided and notified by the Department of Commerce (DoC)."