Preparedness and challenges of RoDTEP Scheme implemented for Exporter [4 th July 2021] CA Vaishali Kharde (Founder and CEO of VBK and Company) Rollout of RoDTEP Scheme PIB Issued 31st December 2020 at 8.40 PM Time of Preparedness Even less than 24 hours Overview RoDTEP Scheme Current FTP Policies Why RoDTEP ? What is RoDTEP Scheme What 'readiness' is necessary Online Procedure Which scheme is beneficial? Challenges Way Forward FTP Policies Overview – form of Benefit Exemption Remission Overview GST refund Duty Drawback Import Benefit Objective Zero rated Export Make Indian exports competitive in Globally Types of Schemes Available • Advance Authorisation Scheme • Duty Free Import Authorisation Scheme • Export Promotion Capital Goods Scheme Benefit at the time of Import • Duty Drawback Scheme • Merchandise Export from India Scheme (MEIS) • Service Export India Scheme (SEIS) Benefit after Export • Export Oriented unit Scheme (EOU) • Special Economic Zone Scheme (SEZ) Status based Incentives Why RoDTEP? Why RODTEP USA has challenged export promotional Scheme included in FTP in India India is not complying with Articles of SCM Agreement What is WTO and SCM Agreement on 1 January 1995 as a successor of the GATT, WTO was born to ensure free trade between its members country. Thus 25 years of Completed on 1 st January 2020. Almost 164 countries are the members of the WTO Agreement on Subsidies and Countervailing Measures (SCM) sets out the remedies which WTO Members have against injurious subsidization and the procedures 500 disputes brought to the WTO and approx. 350 ruling are disposed of in its 25 years of existence Key ASPECT WTO has three key functions comprising of Dispute Resolution, Negotiation for market taxes and Monitoring Dispute Resolution has two stages. At first stage panel is formed to hear the case and decide the matter. At second stage Appellate Body In case of Indian Subsidies US challenged that subsidies provided by India are inconsistent with Articles 3.1(a) and 3.2 of WTO’s SCM Agreement Article 3 (1) (a) or 3 (2) of SCM 3.1 Except as provided in the Agreement on Agriculture, the following subsidies, within the meaning of Article 1, shall be prohibited: ◦ (a) subsidies contingent, in law or in fact, whether solely or as one of several other conditions, upon export performance, including those illustrated in Annex I ; ◦ (b) subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods. ◦ 3.2 A Member shall neither grant nor maintain subsidies referred to in paragraph 1. Decision of DRP DRP ruled that subsidies are contingent upon export performance and not in tune with SCM agreement . Subsidies under Duty - Free Imports for Exporters Scheme (DFIS) within 90 days from adoption of the report Subsidies under the EOU/EHTP/BTP schemes, EPCG, and MEIS, within 120 days SEZ scheme within 180 days Present Status of Indian Case Appeal has been filed by the India against the ruling of DRP with Appellate body Appellate Body requires maximum 7 judges and minimum 3 Judges On 10 th December 2019 two judges retired thus only one functional judge thus appellate body has become difunctional Key Instances 14 March 2018 • Consultations requested 17 May 2018 • Panel requested 28 May 2018 • Panel established 31 October 2019 • Panel report circulated 19 th November 2019 • Appeal is filed by India 10 th December 2019 • Appellate body has become Dis - functional Present Status of Subsidy Subsidies Challenged at WTO • Export Promotion Capital Goods (EPCG) Scheme • Special Economic Zones (SEZ) Scheme • Export Oriented Units (EOU) Scheme, EHTP Scheme and BTP Scheme • Duty - Free Imports for Exporters Scheme (DFIS) • Merchandise Exports from India Scheme (MEIS) Subsidies Not Challenges • Service Export India Scheme (SEIS) • Advance Authorisation Scheme What is RoDTEP Scheme? Long Form Remission of Duties and Taxes on Exported Products Path towards Scheme Budget 2020 • Budget 2020 has inserted section 51B in the Custom Act, 13 Mar. 2020 • The Union Cabinet given an approval for introduction of RoDTEP Scheme 15 th April 2020 • Announced MEIS is available only up to 31.12.2020 • Trade Notice 3/2020 30 th July 2020 • RoDTEP Committee has been constituted • Order No. 605/12/2020 - DBK/736] 1 st September 2020 • Cap on MEIS • Notification No. 30/2015 - 20 31 st December 2020 • RoDTEP Scheme implemented • Press Release