Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

EoUs, SEZs to get RoDTEP sops

Prelims Only | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth
Note4Students

From UPSC perspective, the following things are important :

Prelims level: RoDTEP Scheme, SEZ, EoU

Mains level: NA

In the news

  • In a significant move aimed at bolstering India’s export sector, the Centre recently announced the extension of tax refunds under the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to outbound shipments from Special Economic Zones (SEZs) and Export Oriented Units (EOUs).

About RoDTEP Scheme

  • Introduced by the Government as a duty remission scheme on exports, implemented from 1st January 2021.
  • Aimed at repealing and reducing taxes for exported products to boost exports in the country.
  • Administered by the Department of Revenue, Ministry of Finance.
  • Provides reimbursement of taxes, duties, and levies not refunded under any other mechanism, incurred by export entities in the manufacturing and distribution of exported products.
  • Includes direct costs incurred by exporters and prior stage cumulative indirect taxes on goods.

Compliance with the WTO

  • Follows the global principle that taxes/duties should not be exported.
  • Replaced the Merchandise Export Incentive Schemes (MEIS) after a WTO dispute ruling against India.

Eligibility Criteria

  • Applicable to all export sectors regardless of turnover, with the country of manufacturing of exported goods in India.
  • Applies to merchant or manufacturer exporters directly exporting goods.
  • Goods exported through e-commerce platforms are eligible.

Refund process

  • Rebate provided to eligible exporters as a percentage of the Freight on Board (FOB) value of exports.
  • Remission issued as transferrable e-scrips maintained in an electronic credit ledger by CBIC.
  • E-scrips can be used for paying basic customs duty on imports or transferred electronically to another party.

Back2Basics:

(1) Export Oriented Units (EOUs)

Details
Establishment EOUs are established under the provisions of the Foreign Trade (Development and Regulation) Act, 1992, and the Export Import Policy.
Regulation Regulated by the Directorate General of Foreign Trade (DGFT)
Benefits
  • Duty-free procurement of raw materials.
  • Reimbursement of GST and duty on fuels.
  • Fast track clearance facilities.
  • Exemption from industrial licensing for certain sectors.
Qualification Project must have a minimum investment of Rs. 1 crore in plant and machinery, except for specific sectors like software technology parts and biotechnology parks.
Geographical Scope EOUs can be set up anywhere in India based on scheme criteria.
Comparison with SEZs
  • SEZs are demarcated enclaves outside Customs jurisdiction.
  • SEZs enjoy tax exemptions, while EOUs pay taxes that can be claimed as refunds later.

 

(2) Special Economic Zones (SEZs)

Details
Inception Date SEZ policy in India was first implemented on April 1, 2000.
Objective
  • Enhance foreign investment and provide an internationally competitive and hassle-free environment for exports.
  • Promote exports and ensure a level playing field for domestic enterprises.
SEZ Act 2005 Enacted to provide the legal framework covering all important aspects of SEZ development and operations.
Setting up SEZs
  • Any private/public/joint sector, state government, or its agencies can establish an SEZ.
  • Foreign agencies can also set up SEZs in India.
Role of State Governments
  • State government representatives are consulted during the proposal consideration phase.
  • States must ensure the availability of basic infrastructure like water and electricity before recommending proposals.
Government Control
  • Statutory functions are controlled by the government in all SEZs.
  • The central government controls operation and maintenance in central government-controlled SEZs; the rest are privatized.
Exemption from Labor Laws
  • SEZs are subject to normal labor laws enforced by state governments.
  • A single-window clearance mechanism and simplified procedures/returns have been requested from state governments.
Monitoring Units in SEZs Annually by a unit approval committee consisting of a development commissioner, customs, and state government representatives.
Special Features for Business Units
  • Business units in SEZs are entitled to incentives and a simplified operating environment.
  • No license is required for imports, including second-hand machinery.

 

Try this PYQ from CSE Prelims 2016:

Recently, India’s first ‘National Investment and Manufacturing Zone’ was proposed to be set up in

(a) Andhra Pradesh

(b) Gujarat

(c) Maharashtra

(d) Uttar Pradesh

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