Concept
Foreign Trade Policy (FTP) is regulated by the Government of India by way of the Foreign Trade (Development & Regulation) Act, 1992. This Act is concerned with the development and regulation of foreign trade by facilitating imports into and augmenting exports from India. FTP is a set of guidelines and instructions formulated by Central Government covering a period of 5 years. The latest FTP has been issued covering period 2015-2020. Following schemes are mainly covered in the policy of 2015-2020.
Remission of Duties & Taxes onExported Products (RoDTEP) Scheme
India has rolled out different mechanisms from time to time for the promotion ofexports. Some of the mechanisms are: Export Oriented Units (EOU), Export PromotionCapital Goods (EPCG), Duty Drawback, Special Economic Zones (SEZ) etc. Thesemechanisms primarily focus on rebating or refunding different taxes or dutiesavailable on the exporters.
Remission of Duties and Taxes on Exported Products (RoDTEP) is a new schemelaunched by the government to replace the existing Merchandise Exports from IndiaScheme (MEIS) scheme for exports of goods from India.
To benefit the exporters in place of MEIS (Merchandise Exports from India Scheme)was announced vide press release dated 31-Dec-2020, w.e.f. 01-Jan-2021, to all exportgoods.
- The Scheme will be implemented with end-to-end digitization.
- 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/duties are not exported.
- The RoDTEP scheme would refund to exporters the embedded duties/taxes that were so far not being rebated/refunded.
- The rebate would be claimed as a percentage of the Freight on Board (FOB) value ofexports.
- An exporter desirous of availing the benefit of the RoDTEP scheme shall be requiredto declare his intention for each export item in the shipping bill or bill of export
- The scheme of RoDTEP reimburse the taxes, duties, or levies at the Central, State or Local level which are presently not being refunded under any other mechanism butare incurred in the manufacture process and distribution of exported products
Advance Authorisation
This scheme endeavours to neutralise the incidence of customs duties of the imported inputs. Advance authorisation are exempted from payment of basic customs duty, additional customs duty, anti-dumping duty and safeguard duty, if any. To avail such benefit under the scheme, there is a condition to fulfil export obligation. The scheme necessitates export with minimum value addition of 15%. Advance authorisations are issued to the exporters on the basis of their annual requirements.
Duty Drawback Scheme (DBK)
DBK has been one of the popular and principal methods of encouraging exports. It is a relief by way of refund/recoupment of customs and excise duty paid on inputs or raw materials and service tax paid on input services used in manufacture of export goods. Duty Drawback is beneficial provision given under the Customs Act, 1962 and Drawback Rule, 1995. Drawback is not allowed when assessee opts for advance authorisation scheme. DBK could be all industry rate or brand rate. Latest Notification through which DBK allowed is 110/2015-cus.
Deemed Exports
“Deemed Exports” refer to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in free foreign exchange. It mainly covers supplied made to SEZ/ EOU / STP / EHTP / BTP. Deemed exports are allowed most of the benefits which are extended to exporter making physical exports outside India.
Export Promotion Capital Goods (EPCG) Scheme
EPCG Scheme allows import of capital goods at Zero customs duty. Alternatively, the Authorisation holder may also procure Capital Goods from indigenous sources. Import under EPCG Scheme is subject to an export obligation equivalent to 6 times of duty saved on capital goods to be fulfilled in 6 years. The scheme covers manufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service providers.
