TaxTMI 
TaxTMI 
TaxTMI 
1. Background
On 23-10-2024, the DGFT vide Public Notice No. 27/2024-25, inserted Para 4.94 into the Handbook of Procedures, 2023. Through this Amendment, DGFT has notified an Annual Return for Exporters availing the benefit of RODTEP Scheme. The format for Annual Return is provided in Apendix-4RR, Handbook of Procedures, 2023. In this Article, the following aspects have been considered:
- Applicability of Annual RODTEP Return.
- Consequences for Non-filing the Annual RODTEP Return.
- Key Features of Annual RODTEP Return.
- Our Concerns & Shortcomings of Annual RODTEP Return
2. Applicability of Annual RODTEP Return
The Exporters availing RODTEP Scrips of over 1 Crore in a financial year, shall file the Annual RODTEP Return. An individual Return would be filed against each exported goods (having different HSN). Such Return would be filed on DGFT Portal.
The Due-date to file the Annual RODTEP Return is 31st March of next financial year; which means that Annual RODTEP Return for FY 2023-24, would be filed upto 31-03-2025. In case of delay in filing the Annual RODTEP Return (ARR), late fee has been proposed. Its computation has been depicted through tabular mode:
ARR filed upto 31st March | No late fee |
ARR filed upto 30th June | Late fee of INR 10,000/- to be payable per Return |
ARR filed after 30th June | Late fee of INR 20,000/- to be payable per Return |
3. Consequences for Non-filing the Annual RODTEP Return
In addition to the Late fee, there are additional consequences for Exporter, against non-filing of Annual RODTEP Return. Such consequences are analysed as under:
S. No. | Situation | Consequence |
RODTEP scrips availed & utilised | No Action | |
RODTEP Scrips availed & but NOT utilised | Freezing of Scrip, upto the filing of Annual RODTEP Return | |
RODTEP Scrip for future exports | Exporter will be treated as ‘ineligible person’ to avail RODTEP scrips. |
4. Key Features of Annual RODTEP Return
In the Annual RODTEP Return, the Exporter is required to provide insights on taxes & levies actually borne by him, while manufacturing & transporting the export goods. The Govt. wishes to compare the incentive availed, with the cost actually incurred by the Exporter. The key features are analysed as under:
- Reporting of Value, Quantity & Taxes paid against each raw material, used for manufacture of export goods
- Reporting of Excise Duty & VAT paid on inbound & outbound transportation of goods
- Reporting of Excise Duty & VAT paid on Fuel used in manufacture of export goods
- Reporting of GST paid against purchases from Unregistered Dealers
- Reporting of Stamp Duty paid on Export-related documents
- Reporting of Electricity Duty paid against manufacture of Export-goods.
- Calculation of Duties, Levies & taxes actually saved by the Exporter.
- Comparison between Taxes actually saved & RODTEP benefit availed by Exporter.
5. Our Concerns & Shortcomings of Annual RODTEP Return
It is often seen that actions performed with noblest intentions ends up with ignoble results. The idea of calculating the levies & taxes actually saved, goes against the foundation of RODTEP scheme, where such levies & taxes are calculated by DGFT (refer Appendix 4R). The exporter gets his incentive, based on such working. This departure is bound to cause anxiety within the exporters. The shortcomings of Annual RODTEP Return are considered as under:
- Denial of RODTEP benefits by hawkish Custom Officials
There can be some cases where the levies & duties saved, is less than the RODTEP benefit availed by the Exporter. In such cases, the Custom Officials can initiate recovery proceedings for balance amount alongwith interest. This will increase litigation risk for the exporters.
- Difficulty in Computation of VAT & Excise Duty Expenses on Transportation
Since July-2017, GST is levied on transportation services by GTA & Railways. The Exporter does not directly incur expense on Excise Duty & VAT against these services. However, GTA /Railways has actually pays VAT & Excise Duty on fuel used by them. These expenses form part of overall cost, but are hidden. The Exporter will fill these Columns on estimated basis, thereby defeating the entire exercise.
- No Provision for Revision /Correction of Annual Return
The DGFT has not provided any mechanism to revise an Annual RODTEP Return which has been filed by Exporter. Such revision would be necessary, in case any incorrect details /omission has been made in original Return.
6. Conclusion
The Annual RODTEP Return vastly increases the compliance burden for exporters. Plus, it heightens litigation risk against efficient exporters, who have switched to renewable sources of energy, such as Solar Power or Electric Vehicles, thereby decreasing their input costs. The hidden Fuel expenses would be reported on estimated basis, thereby distorting the entire exercise. These consequences are surely not intended. Thus, DGFT is urged to clarify the exporter’s concerns & amplify ‘ease of doing business’ in India.