Exporters unable to take RODTEP benifits as software fails to generate scrip as per new rates

Challenges continue for India's exporting community as businesses claim that they are still unable to take the benefits announced by the union government to push exports under the ambitious RoDTEP (Remission of Duties and Taxes on Exported Products) scheme.

RoDTEP rates were announced on August 17, after a delay of eight months. The benefits under the RoDTEP scheme are applicable from January 1, 2021, but to date, exporters are unable to claim the benefits, sources privy to the developments told CNBC-TV18.

Under the RoDTEP scheme various central and state duties, taxes, and levies imposed on input products like taxes such as duty on power charges, VAT on fuel in transportation, farm sector, captive power generation, mandi tax, stamp duty and central excise duty on fuel used in transportation, among others, are refunded to the exporters, as a percentage value of exports. This percentage can be claimed by exporters via generating an e-scrip against the shipping bill, which can be used to pay Basic Customs Duty.

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Sources in the know told CNBC-TV18, "The customs department is yet to make amendments to the ICEGATE software to factor in the rates notified under RoDTEP. For new shipping bills, post-September 1, RoDTEP rates are being considered in the software but scrips are not getting generated. E-scrips will be generated only post amendments made by customs to ICEGATE and firstly, the e-scrips will be first generated for old shipping bills and only then the scrips will be issued for the new shipping bills."

"ICEGATE was working on a notional rate of 0.5 percent for old shipping bills (bills generated between January 1-end of August) leaving a credit in the ledger account of exporters, which can be claimed later on since the RoDTEP rates were not finalised," sources close to the development said.

The challenges do not end here. For the textile sector which has been kept separate from the RoDTEP scheme, as they have been covered under the ROSCTL scheme, "The exporters are working without the notional rate and are yet to even raise the credit for the older shipping bills and the new rates notified under ROSCTL are also now reflecting in the system," according to multiple people familiar with the development.

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Experts see it as a challenge hampering the businesses. Abhishek Jain, tax partner, EY, said, "After a long wait from the exporters' side, the government had announced the RoDTEP rates on August 17, 2021, for exports made from January 1, 2021. Now, three weeks have also passed from the date of official notification but the ICEGATE portal to issue scrips as per new rates is still not updated. The export industry would expect such portal changes to take place at the earliest and updated scrips are released for both old and new exports.