Yes, scrips issued under the RoDTEP are the transferable duty credit/ electronic scrip (e-scrip) which will be maintained in an electronic credit ledger by the CBIC. In other words, these e-scrips would be transferable.

Based on the previous advisory issue by ICEGATE and the press release by Ministry of Finance, the following could be inferred – The owner of the scrip (either the original exporter beneficiary or any other IEC to whom the scrip was transferred on ICEGATE portal) will be able to use the scrip in the Bills of Entry the same way as any other duty credit scrips issued by DGFT, by giving the details in the license table of the Bill of Entry.

The scheme code to be used for these scrips would be “RD” along with the applicable Notification Number. The scrip can used for the purpose of payment of Basic Customs Duty.

However, the procedures to implement the scheme are yet to be issued by the Department of Revenue.

With effect from 01.01.2021, it is mandatory for the exporters to indicate in their Shipping Bill whether or not they intend to claim RoDTEP on the export items. However, since the final list of HS codes eligible for RoDTEP scheme and the corresponding rates were not notified by the Government for the period between 01.01.2021 to 17.08.2021, this declaration might have been missed by few exporters.

Although, it has been categorically specified by the CBIC that, if RODTEPY is not specifically claimed in the Shipping Bill, no RoDTEP would accrue to the exporter i.e., even though the items and rates are not notified the Government for RoDTEP yet, the exporters must indicate their intent for claim at the time of Shipping Bill filing itself and that cnce the rates are notified, system would automatically calculate the RoDTEP amounts for all the items where RODTEPY was claimed. It has also been categorically provided that no changes in the claim will be allowed after the filing of the EGM.

Since the detailed rules and procedure regarding the grant of the RoDTEP claim and implementation issues including the manner of documentation etc. are yet to be notified. It is expected that due care would be taken in the rules to provide for belated declarations in respect of the past exports.

However, in case no such benefit is provided, then the exporter needs to firstly check the possibility of making changes in the details of the claim indicated in the export documentations already filed and based on which whether the system is automatically calculating the RoDTEP amounts for all the items where RODTEPY was claimed. In case the same is barred by the placing the system restrictions, then the matter needs to be represented before the authorities or one can consider filing a writ petition before the jurisdictional High Court challenging such a restriction.

It could be possible that an exporter considers to opt for the other beneficial schemes such as Advance Authorization, MOOWR, EOU, Jobbing etc. instead of RoDTEP. In this case, it is expected that there would be some checks built in the system to disallow RoDTEP benefit where the benefit of certain other schemes like Advance Authorization, EOU and Jobbing etc. has been availed. While some checks would be built in within the system at the time of filing the Shipping Bill i.e., the exporter (or the authorized Customs Broker) has to submit the statement as mentioned in para 2(b) with the Shipping Bill that no undue benefit would be availed.

However, despite such declaration or otherwise, if the e-scrips are credited to any exporter which the said exporter does not intend to claim either due to that being not more beneficial than the other schemes or it being ineligible, then the exporter must immediately remit back the benefit received by making the payment through an online chalan or any process which could be provided in the rules and procedures notified by Department of Revenue.

The broad procedure of claiming the benefit of these scrips is as under:
To avail the scheme exporter shall make a claim for RoDTEP in the shipping bill by making a declaration.
Once EGM is filed, claim will be processed by Customs.

Once processed a scroll with all individual Shipping Bills for admissible amount would be generated and made available in the users account at ICEGATE,

User can create RoDTEP credit ledger account under Credit Ledger tab. This can be done by IECs who have registered on ICEGATE with a DSC.

Exporter can log in into his account and generate scrip after selecting the relevant shipping bills.

RoDTEP Credit Ledger can be used by the Importer/Exporter/CHA only after creating a successful credit ledger account at ICEGATE. Below are the steps to create a RoDTEP Credit Ledger Account with ICEGATE.

Step 1: User can select the option of RoDTEP (credit ledger) account creation by clicking on the “RoDTEP” tab under the “Our Services” section of https://www.icegate.gov.in/ as indicated.

Step 2: User will be directed to the login page. After log in using valid credentials, user will be able to see the Credit Ledger option on the left panel as shown below. If user is not registered they can get themselves registered as per advisory through this link: https://icegate.gov.in/Download/JavaSetupForDSC.pdf

Step 3: Since the user has not created a credit ledger account initially, the following page will be displayed. The user can select the scheme name from the drop-down as RoDTEP.

Step 4: After Credit Ledger account creation is done by the user, a grid view with the following details will be displayed to the user.

User can perform various operations mentioned as follows from this Home Page:

• Scroll Details
• Scrip Details
• Transaction Details
• Transfer Scrip
• Approve Scrip Transfer

Based on initial advisory issued by ICEGATE following could be inferred, however conclusion could be made only after the notification of rules and procedures by Department of Revenue:

In order to claim the benefit of the RoDTEP, The exporter will have to make following declarations in the SW_INFO_TYPE Table of the Shipping Bill for each item:

• INFO TYPE = DTY INFO QFR = RDT
• INFO CODE = RODTEPY – If RoDTEP is availed RODTEPN – if not availed.
• INFO MSR = Quantity of the items in Statistical UQC as per the Customs Tariff Act for that item RITC INFO UQC = UQC for the Quantity indicated in INFO_MSR Additionally, for every item where RODTEPY is claimed in INFO CODE, a declaration has to be submitted in the Statement Table of the Shipping Bill as below.
• STATEMENT TYPE = DEC STATEMENT CODE = RD001

Submission of the above statement code for RoDTEP availed items would indicate that the exporter has made the necessary declaration, while claiming RoDTEP benefit.

Based on the above declarations, system would process the eligible RoDTEP. Options have been made available in system for officers to generate RoDTEP scrolls. Once the scroll is generated, the respective amounts would be available with the exporter as credits on the ICEGATE portal. Scrips once generated will reflect in the exporter’s ledger and will be available for utilization in paying Basic Customs Duty during imports or for transfer to any other entity having IEC and a valid ICEGATE registration.

Once the RoDTEP scroll is generated, the credits allowed will be available within their ICEGATE login of the exporter to claim and covert into credit scrips. In case the exporters have not registered on ICEGATE already with their digital signatures, they may refer to this advisory (2_Advisory_Registration_APPROVED.pdf (icegate.gov.in)) and complete registration in order to avail the benefits of RoDTEP.

The exporter will be able to club the credits allowed for any number of Shipping Bills at a port and generate a credit scrip for the same on ICEGATE portal. Scrips once generated will reflect in the exporter’s ledger and will be available for utilization in paying eligible duties during imports or for transfer to any other entity having IEC and a valid ICEGATE registration. A detailed advisory for the benefit of the exporter on the scrip generation, ledger maintenance and transfer facilities will be published soon on ICEGATE. These facilities will be made available once the final RoDTEP rates are notified and scroll generation is enabled.

Once a person has created an electronic credit ledger account in its ICEGATE portal, then it can transfer a scrip to another person. It is important to note that the person to whom the e-scrip is issued must also possess a valid credit ledger account. The following steps needs to be carried out to transfer the scrips:
Select the “Transfer scrip” tab to transfer particular scrip to any other user.

The scrip to be transferred from the generated scrips must be selected. The list of the generated scrips is available in the drop-down menu along with the “Scrip Available” Option.

Upon selection, the user can view the scrip amount and enter the IEC of the user to which the scrip is to be transferred. These details, of the IEC holder to whom the user wants to make a transfer, can be entered in the textbox alongside the “Enter Transferee” option.

OTP is generated and sent to the user who has initiated the transfer on the registered mobile number and email ID.

After successfully transferring the request, Scrip will be viewed in a grid on the same page. The user who has initiated the transfer scrip request can cancel the request at this stage using the cancel button as shown below.

An approval request is sent to the IEC for whom a transfer request has been initiated by the user. This IEC holder to whom the request has been sent can either approve or reject the request in the “Approve scrip transfer” tab.

After clicking the Approve button, the transferee is directed to fill OTP which is sent to the transferee over the registered mobile number and email ID. The Scrip will be transferred to the transferee after successful OTP validation.

At the time of filing the shipping bill under the RoDTEP scheme, following declaration must be filed:

“I/We, in regard to my/our claim under RoDTEP scheme made in this Shipping Bill or Bill of Export, hereby declare that:

I/ We undertake to abide by the provisions, including conditions, restrictions, exclusions and time-limits as provided under RoDTEP scheme, and relevant notifications, regulations, etc., as amended from time to time.

Any claim made in this shipping bill or bill of export is not with respect to any duties or taxes or levies which are exempted or remitted or credited under any other mechanism outside RoDTEP.

I/We undertake to preserve and make available relevant documents relating to the exported goods for the purposes of audit in the manner and for the time period prescribed in the Customs Audit Regulations, 2018.”

The administration of the Scheme would be done by the Ministry of Finance. The generation and utilisation of rebate benefit should be done through portal designed by the MoF. Hence, there do not appear any uses of DGFT portal in the process.

Correct classification of goods at a proper 8 digit HS code level plays a very important role under the RoDTEP scheme as the entire rate/ value structure of the scheme is derived based on the HS Code system. In other words, if one has to identify the rate/ value of rebate available to their product, then the same can be done based on the corresponding 8 digit level HS code assigned to the product. Therefore, it is suggested that the exporters thoroughly review their HS codes for various products that are exported by them and reassure the correctness of the claim under the scheme. E.g. auto mobile parts classifiable under general purpose items under chapter 73 are not eligible for RoDTEP whereas as other automobile parts covered in chapter 87 are entitled for the benefit of RoDTEP.

Now that the various products on which the benefit under the scheme is eligible along with the rate/ value cap of the benefit is provided by the government, it would be imperative for the businesses to make an impact assessment of the rebate on the business. Various aspects to be looked into in the course of this assessment are as under:

Eligibility of the scheme on the various products along with the rate/ value cap must be clearly identified; HS classification codes opted must be revisited and recalibrated to correctly avail the benefit under the scheme;

Evaluation of opting for RoDTEP benefit or to opt for MOOWR, EOU, Advance Authorisation benefits etc. A detailed cost benefit analysis must be performed so that an appropriate, informed and a timely decision can be taken;

Review of the actual cost of taxes, levies incurred vis-à-vis the benefit expected under this scheme and the net marginal cost/ benefit;

Change in the pricing of the goods considering the benefit given under the erstwhile MEIS/ SEIS and the RoDTEP scheme i.e., passing on the benefit/ cost in the supply chain;

Reviewing the vendor contracts and the pricing fixed considering the benefit now available under the RoDTEP scheme;

Review of the customer contracts in case of manufacturer exporting the goods through a merchant.

Various other suitable implementation actions must be immediately taken depending upon the impact on the each exporter.

No, As per the concept note and various other policy level documents available in the public domain and as per the Notification No. 19/2021 Dt. 17.08.2021, it is seen that presently there is no mechanism to fix a brand rate as in the case of drawback based on the actual actual cost incurred by the exporters on account of various taxes and levies. As per the present understanding of the scheme, only a standard percentage is prescribed either as a rate to be derived on the FOB value along with a value cap in some cases or as a fixed quantum of rebate amount per unit. Different rate, value cap etc. has been provided for different products. Further, since the claim processing is automated based on the details submitted in the shipping bill, it looks that presently no option is provided for the exporter to compute the benefit on a brand rate basis of the actual cost.

It is pertinent to note that one of the essential feature of this scheme is that the benefit if available in respect of the goods exported i.e., the benefit is available in case where the goods are physically exported out of India to a place outside India.

Further, no restriction is carved out in cases where the goods exported are exempted from GST. In other words, even if the goods exported outside India are exempted from GST, still the benefit of RoDTEP can be claimed as long as the said goods are physically exported outside India and all other conditions provided in the scheme are satisfied.

Several cases of monetisation of credit fraudulently obtained or ineligible credit through refund of Integrated Goods & Service Tax (IGST) on exports of goods have been detected in the past. In order to restrict such fake exports being done mainly to avail the GST refund and other benefits and incentives under the Customs law. The CBIC through Directorate General of Analytics and Risk Management (DGARM) has been identifying the risky exporters. Once an exporter is identified to be a risky exporter, then the refund claim under GST including other benefits viz., drawback, MEIS etc. for that exporter is blocked i.e., the scrolls in respect of such exports would be kept in abeyance for verification until the completion of the verification by jurisdictional CGST or by Customs officials.

Further, it is provided in the Notification No. 19/ 2021 issued in the context of RoDTEP that necessary provisions would be provided for suspension/ withholding of the RoDTEP in case of frauds and misuse, as well as imposition of penalty will be built suitably by the CBIC.

Social Welfare Surcharge (SWS) is levied under Section 110 of Finance Act, 2018 as a duty of Customs. For instance, the SWS is calculated at the rate of ten per cent on the aggregate of duties, taxes and cesses which are levied and collected under section 12 of the Customs Act, 1962 and it is in addition to any other duties of Customs or tax or cess chargeable on imported goods.

The RoDTEP benefit is provided by way of an e-credit scrips issued under remission scheme for exporters under the Foreign Trade Policy. As per Para 4.56 of the Foreign Trade Policy 2015-20, these scrips can be used for payment of Basic Customs Duty only. It is to be noted that the cesses are a separate levy made under a separate enactment and the collections generated out of the proceeds for cesses are used for some specific purposes. Although, it is levied as a duty of customs, but that by it selves does not make it a Basic Customs Duty. Hence, it is to mention that the debit of SWS through e-credit scrip is not envisaged in the FTP and hence the same needs to be paid through a separate challan in cash.

This aspect is also clarified by the CBEC vide its Circular No. 2/2020-Cus. Dated 10-1- 2020 in the context of utilisation of SWS for the purpose of MEIS, SEIS etc. The analogy explained above may also apply to Health cess.

It is to be noted that additional duties of customs and IGST are levied under section 3(1), 3(3) and 3(5) of the Customs Tariff Act. Earlier, as per Para 3.02 of the Foreign Trade Policy 2015-20, these duty credit scrips would be used for payment of Basic Customs Duty and Additional Customs Duty specified under sections 3(1), 3(3) and 3(5) of the Customs Tariff Act, 1975 for import of inputs or goods and for payment of Central Excise duties on domestic procurement of inputs or goods. However, under the RoDTEP scheme, this benefit is restricted to only the Basic Customs Duty. Therefore, in our view the e-credit scrip issued under the RoDTEP cannot be used for the debit for payment of additional duties of customs.

It is pertinent to note that a restriction is brought under Notification No. 19/ 2021 vide Para 4.55 providing that the benefit of the scheme would not be available in respect of the goods which have been taken into use after manufacture.

Whether rebate could be claimed on international jobbing transactions? Ans: No, these are specifically covered in the excluded categories.

Sale of goods through an online platform by way of an e-commerce is now very common and the same is not an exception for transactions that are undertaken in the course of international trade and commerce. If any goods are sold based on the orders placed by the customers outside India through an online platform, then the benefit of the scheme should be eligible provided there is a physical export of the goods from an EDI port. Also, the corresponding shipping/ Airway bill must be in the name of the exporter.

It is provided in the Notification No. 19/ 2021 that the exporter would be required to keep records substantiating the claim made under the scheme. A monitoring and audit mechanism with an IT based Risk Management System (RMS) would be put in place by the CBIC, Department of Revenue to physically verify the records of the exporters on a sample basis. Sample cases for physical verification will be drawn objectively by RMS, based on risk and other relevant parameters.