RoDTEP

Also called: Remission of Duties and Taxes on Exported Products · Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Beyond NCERT

Meaning

RoDTEP (Remission of Duties and Taxes on Exported Products) is an export scheme that refunds taxes and duties hidden inside the cost of an exported product. These embedded taxes were not refunded through any other route. Examples are VAT on the fuel used to transport goods, electricity duty paid by a factory and mandi tax. Remission means giving back tax that was already paid. RoDTEP came in 2021. It replaced the MEIS (Merchandise Exports from India Scheme), which the WTO had found illegal. The guiding idea is to "export goods, not taxes", which keeps Indian exports competitive in world markets. Foreign Trade Policy 2023 makes remission, not reward, the basis of export support.

Example

In 2019 a WTO panel ruled that MEIS was an export subsidy, meaning a payment tied to export performance and banned under WTO rules (the US case DS541). India had lost its exemption from this ban after graduating from Annex VII of the WTO subsidy agreement. So in 2021 it switched to RoDTEP. An Indian engineering-goods exporter now gets back the electricity duty and fuel taxes built into its costs, instead of a reward simply for exporting.

Don't confuse with

• MEIS: this paid a reward linked to export performance, so it was a banned export subsidy. RoDTEP only refunds taxes already paid, so it is designed to be WTO-compatible.
• Duty drawback: this refunds customs duties paid on imported inputs used in exported goods. RoDTEP covers other embedded taxes that drawback does not refund. (RoSCTL follows the same logic as RoDTEP but only for apparel and made-ups.)

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• International Trade Policy, WTO and Intellectual Property