Ineligibility of RoDTEP Scheme for exporters availing benefit of MOOWR Scheme and depiction of RoDTEP benefit basis notional rates on ICEGATE portal

by | Aug 27, 2021 | Outlook

Ineligibility of RoDTEP Scheme for exporters availing benefit of MOOWR Scheme. The key points are as under:

·                Section 65 of the Customs Act, 1962 (‘Customs Act’) allows owner of warehoused goods to carry on manufacturing process and other operations in private bonded warehouse before clearance of goods for home consumption.

·                Government introduced the Manufacture and Other Operations in Warehouse Regulations (‘MOOWR’) vide Notification No. 44/2019 – Customs (NT) dated June 19, 2019, wherein a person can undertake manufacturing operations in a private bonded warehouse and import goods without payment of duty for export clearance. In accordance with Section 65 of the Customs Act read with MOOWR Scheme, exporter need not pay customs duty on raw materials incorporated in manufactured goods if manufactured goods are exported.

·                It is pertinent to highlight that RoDTEP Scheme is not available to exporters availing benefit of MOOWR Scheme. MOOWR Scheme exempts customs duty only on raw materials and not other taxes and duties embedded in export goods like electricity duty, tax component in other inputs and input services.

NITYA Comments: On one hand, the Government is promoting MOOWR Scheme as a step towards make in India and to ease compliance burden of importers and exporters. However, ineligibility of RoDTEP Scheme will act as a big deterrent for exporters from opting this scheme.Exporters should file a representation before Government to allow them benefit of RoDTEP Scheme along with MOOWR Scheme. 

In addition, we wish to highlight that although Government notified RoDTEP rates under Appendix 4R, but Government is yet to make necessary changes on ICEGATE portal. Shipping Bills for export goods still capture RoDTEP benefit as per notional rates and not rates as notified under Appendix 4R. ICEGATE portal is also showing declaration to this effect that benefit will be granted basis notional rates. Exporters may ignore this declaration and they will be entitled to benefit as per notified rates. 

Hope you find this an interesting read. Please feel free to share your comments / feedback on the same.