Electrical equipment industry seeks rate revision in RoDTEP scheme

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Electrical equipment industry seeks rate revision in RoDTEP scheme

The government on August 17 notified the rates and norms for the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for 8,555 export items for a cost of Rs. 12,500 crore to the exchequer. 

The RoDTEP scheme had kicked in from January 1, after the earlier Merchandise and Services Export Incentive Schemes (MEIS and SEIS) were scrapped as they were found to be impermissible under the World Trade Organisation norms.

The rates for different sectors include 0.5 per cent, 2.5 per cent and 4 per cent. Though the electrical industry was awaiting clarity on the rates for a long time, the announcement by the government has left the sector largely disappointed at the turn of events.

Anil Saboo, President, IEEMA asserts, “Though the industry was waiting for clarity on the rates for a long time, we are glad that it has been announced now, but the scheme disappointed many exporters as the rates are much lower than MEIS rates with lesser budget allocation. The main aim of the RoDTEP scheme was to give a boost to Indian exports by offering a level playing field to the domestic industry abroad. But looking at the present notification we believe that the ambitious target of achieving $1 trillion in exports by 2025 will be achieved only if the Government review the rates especially for Electrical equipment industry which have excellent potential to grow by three times.”

Vimal Kejriwal, Chairman, IEEMA Public Policy Cell stated, “The Rates for Products like Iron & Steel (Chapter 72), Articles of Iron & Steel (Chapter 73), Mineral products (Chapter 25-27) and Products of Chemicals (Chapter 28-31) have not been notified which we assume will be done soon, else it would be a major setback to the respective Industries. We are pleased to see that rates for Project exports have been notified separately under Chapter 98, however, clear process needs to be laid out because of absence of Chapter 98 under the export schedule currently. The RoDTEP rate of 0.5% for Project Exports is significantly lower than 3% under the erstwhile MEIS scheme and may adversely impact the competitiveness of Indian Project Exporters.”

Vijay Karia, Vice President, IEEMA said, “The announcement went against his expectations. The RodTep scheme for the cable industry is abysmally low rate of 0.8% per meter for electric cables to 0.9% per meter for fibre optic cables. This does not cover the input duties and taxes on manufacturing and inland transportation costs, which as a matter of principle should not be exported in order to remain competitive in exports. We hope this is an interim step from the government and proper rates will be affixed shortly after taking inputs from industry.”

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