The RoDTEP scheme came into effect on Jan. 1 but lack of clarity is hampering sectorтАЩs ability to price
Even as exporters fret over an inordinate delay in notification of the rates under a new WTO-compliant scheme for rebating taxes and duties to the export sector, they are also seeking greater clarity from the government on some grey areas in the schemeтАЩs functioning, according to tax consultancy firm RSM Astute.
тАШVery near futureтАЩ
On Tuesday, Commerce Secretary Anup Wadhawan had said that the rates under the RoDTEP (Remission of Duties and Taxes on Export Products) scheme, which came into effect on January 1, would be notified in the тАШvery, very near futureтАЩ.
Exporters have been urging the government to lift the uncertainty over the benefits that would accrue to them under the scheme, as they are it finding it difficult to price fresh global orders in the absence of the crucial information especially in sectors with thin margins.
тАЬThe trade and industry is hopeful that the schemeтАЩs operation would be smooth, and concerns would be addressed in the early stages of operationalisation,тАЭ RSM Astute noted in a white paper on the scheme. тАЬDue to COVID-19, IndiaтАЩs exports may require more stimulus and the exporters hope that RoDTEP would not be an impediment to their business plans,тАЭ it added.
Grey areas
The consultancy flagged the power given to Customs officers to suspend the scrips or refund credits or even to bar exporters from utilising these scrips especially as the grounds on which such suspensions could be done have not been spelt out.
As per government statements, the refund of taxes on exports would be credited to exportersтАЩ ledger account with the Customs department, which could be utilised to pay basic customs duty on imported goods. тАЬClarity would be required whether the refund could be utilised to pay other taxes on imported goods such as IGST and Social Welfare Surcharge,тАЭ the tax consultant said. Under the MEIS scheme, which RODTEP has replaced, these refund credits could be used to pay customs duty, additional customs duty (with some exceptions) as well as central excise duties.
The delay in operationalising the scheme is affecting the exporters by restricting their ability to price products competitively and the uncertainty was making it harder to finalise contracts, RSM Astute pointed out.
