From mint · Banikinkar Pattanayak · · 2m
Govt Overhauls Export Tax Refund Schemes
India's government sets up panels to reform tax refund schemes for exporters amid global uncertainties.
In brief
India's government sets up panels to reform tax refund schemes for exporters amid global uncertainties. India's government will overhaul two tax refund schemes for exporters by creating panels to improve targeting and fund allocation, addressing challenges from global conflicts and trade uncertainties. Originally…
Government Overhauls Export Tax Refund Schemes
The government plans to overhaul two tax refund schemes for exporters to improve targeting and fund allocation amid global uncertainties.
Two Panels Formed for Scheme Review
Two panels have been set up to review and reframe the Remission of Duties and Taxes on Exported Products (RoDTEP) and Rebate of State and Central Taxes and Levies (RoSCTL) schemes.
EFC Recommends Better Targeting
The expenditure finance committee recommended better targeting and optimal use of funds after commerce and textiles ministries sought nearly ₹2 trillion for the next five years.
Schemes Aim to Keep Exports Zero-Rated
The schemes were rolled out to keep exports zero-rated, aligning with global best practices where exports do not carry domestic taxes.
RoDTEP and RoSCTL Cover Embedded Taxes
Refunds cover embedded central and state levies outside the GST regime, including those on fuel, electricity, stamp duty, and mandi tax.
Panels Headed by Senior Officials
The RoDTEP panel is led by Director General of Foreign Trade Lav Agarwal, while the RoSCTL panel is headed by Arti Kanwar from the textiles ministry.
Panels to Influence Union Budget
Recommendations from both panels are likely to be discussed during the upcoming Union budget deliberations and could form the basis of revamped frameworks.
Exporters Face Global Challenges
Exporters are grappling with the West Asia and Ukraine wars and other external headwinds, seeking timely and adequate tax refunds.
Current Refund Rates and Challenges
Exporters receive refunds ranging from 0.3% to 4.7% under RoDTEP and 1.7-8.2% under RoSCTL, but data collection remains difficult due to multiple stages and dispersed industries.
The headline
India's government will overhaul two tax refund schemes for exporters by creating panels to improve targeting and fund allocation, addressing challenges from global conflicts and trade uncertainties.
