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Export bodies seek RoDTEP revision to include SEZ, EOU products
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SME Times News Bureau | 02 Sep, 2021
As India embarks on its 'Aatmanirbhar Bharat' journey at breakneck
speed, a key element behind fulfilling that dream is the exports sector
towards achieving an exports target of $400 billion this fiscal and
further the target to $1 trillion by 2025.
But the immense
potential of Indian exports is yet to be unlocked and fully realized.
Right now, Indian exporters also need to be globally competitive
vis-a-vis major exporter countries in the international markets.
Globally the Government support to enhance cost-competitiveness of
exports by way of various incentives/subsidies for raw materials, tax
benefits and incentives are prevalent, majorly in China, GCC countries
and other manufacturing majors, and India also needs similar push to
boost exports.
The exporters community was desperately waiting
for notification of RoDTEP rates for over last eight months since its
announcement on 31.12.2020. However, there is high uncertainty arising
for a large segment of exporters as the notified guidelines have
excluded various key export segments from the purview of the RoDTEP
Scheme, such as the exports from SEZs/EOUs, against Advance
Authorization, DIFA, from non-EDI ports and bonded warehouses u/s 65 of
Customs Act, 1962 which are crucial for Indian economy.
Meanwhile,
the erstwhile MEIS (Merchandise Exports from India Scheme) regime was
also applicable on such exports and entailing the cost-competitiveness
to Indian exporters. In fact, MEIS scheme gave the necessary impetus to
Indian exporters to compete in the global market, resulting in net
increase of exports in last couple of years.
Various industry
associations and export chambers like FIEO, EEPC, FIMI, ISA, AAI etc.
have appealed to the government to revisit the RoDTEP guidelines for
inclusion certain export segments which have been currently excluded.
They need the support of RoDTEP to be successful contributors to the
economy.
Contrary to the benefits available to the
aforementioned exports category, the ambit of RoDTEP Scheme provides a
much wider coverage with remission of embedded Central, State and local
duties/taxes that are not being rebated/refunded other than the Basic
Custom Duties. Thus, RoDTEP and other export schemes intend to provide
different benefits for exporters and are mutually exclusive. Therefore,
there is no justification for depriving the benefit for the
aforementioned segments of exporters by exclusion from RoDTEP Scheme
post withdrawal of MEIS, which creates a double whammy for such
exporters. As the benefit of MEIS has also been withdrawn for exports
for these units from 01.01.2021 onwards, their exclusion from RoDTEP
Scheme comes as a huge set-back and will render Indian exports to huge
disadvantage as the industry is struggling to retain its
cost-competitiveness vis-à-vis global players in international markets.
SEZ/EOUs
contribute to over 30% of the country's exports and are bearing the
high unrebated taxes and duties. All exporters of these, now excluded
product groups even made shipments under RoDTEP and got notional RoDTEP
rates in their shipping bills. Their exclusion now is a deep blow to the
exports sector. This is in stark contrast to the fact that the previous
MEIS regime was applicable to these export categories and assured
cost-competitiveness to Indian exporters Additionally, since most
SEZ/EOU locations are operating as non-EDI ports as of date, such
exports through non-EDI ports also may be considered as part of the
RoDTEP scheme.
Moreover, the Advance Authorization scheme only
provides relief w.r.t Basic Custom Duty on import of inputs which are
physically incorporated in export products and does not provide complete
zero-rating of the exports. Even after availing of this scheme, the
exporters still have to incur several costs, mainly in the form of
direct taxes for electricity, freight, fuel etc which will get embedded
with the exporter's cost if not remitted under RoDTEP.
It should
be borne in mind that while RoDTEP has excluded crucial sectors from
its ambit, it is still a step towards offering level playing parity to
the Indian exporters in compliance with the WTO provisions. RoDTEP is
one of those few WTO compatible measures to support exports therefore
WTO compatible measures need to be fully and effectively utilized to
support exports. RoDTEP eliminates the extra burden of the embedded
non-creditable taxes and duties. It is for these very reasons that
RoDTEP's umbrella needs to be cast further to include vulnerable export
categories to make the dream of Make In India real.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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