INDIA: Duty Refund Scheme for Imported Inputs Announced

Details of a new scheme aimed at refunding the import duty paid on inputs for items later exported have been announced by the Ministry of Commerce and Industry (MCI). The initiative – the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme – will cover 8,555 export items, with eligible manufacturers entitled to use any such credit to pay basic customs duty on imported goods or to pass on to other importers. 

Overall, the tax refund rates will range from 0.5% to 4.3% of export value, with the scheme extending to a variety of sectors, including: gems and jewellery; marine; agriculture; leather, automotive; electronics; machinery; plastics; and electrical. A full list of RoDTEP rates is available here. 

Specifically excluded from the scheme, however, are a number of industries believed to be thriving without the need for any additional incentives, most notably the steel, chemical and pharmaceutical sectors. In addition, items produced or exported at export-oriented units and special economic zones; deemed exports; export goods subject to a minimum export price; and restricted or prohibited items are all excluded from the scheme.