Duty Refunds Likely for Steel, Pharma and Chemical Exports

As a result of falling demand in advanced economies, India is considering extending a key export scheme to pharmaceuticals, chemicals, and steel products. This will help boost exports that are being hit hard by falling demand. As part of the Refund of Duties and Taxes on Exported Products or RoDTEP scheme, there have been discussions between the ministries of commerce and industry and finance about including these sectors in the scheme.

The input duty remission scheme for exporters was implemented on January 1, 2021, but these sectors were not included. ET has been told that a proposal to include these sectors under RoDTEP is currently being discussed by a senior government official who is privy to the deliberations.

The official thinks a cabinet note could be moved after discussions with the finance ministry. During the scheme's first phase, an incentive of 0.3-4.3% is offered to 8,555 products in various employment-generating sectors such as marine, agriculture, leather, gems and jewellery.

It is estimated that around Rs 13,000 crore has been provided by the government under RoDTEP for refunding duties and taxes. These duties and taxes include the value-added tax on fuel used in transportation, mandi tax, and duty on electricity used in manufacturing. According to the official, the commerce department will need an additional Rs 2,000 crore to expand the scheme's coverage.