The Union Cabinet on Friday approved the remission of duties or taxes on export products (RoDTEP), a scheme for exporters to reimburse taxes and duties paid by them such as value added tax, coal cess, mandi tax, electricity duties and fuel used for transportation, which are not getting exempted or refunded under any other existing mechanism.

“This RoDTEP scheme is very important for our exports to get level playing field at the international level,” said commerce and industry minister Piyush Goyal.

The scheme comes at a time when India’s exports have declined and face uncertainty due to the spread of the Covid-19. India’s exports were $265.26 billion in the April-January period, a 1.93% decline on-year. The country had clocked $331 billion of exports in 2018-19.

Under the scheme, an inter-ministerial committee will determine the rates and items for which the reimbursement of taxes and duties would be provided.

The sequence of introduction of the scheme across sectors, prioritization of the sectors to be covered, degree of benefit to be given on various items within the rates set by the committee will be decided and notified by the Department of Commerce.

The rebate would be claimed as a percentage of the Freight On Board (FOB) value of exports.

Finance minister Nirmala Sitharaman had announced the RoDTEP last year to incentivise exporters at an estimated cost of Rs. 50,000 crore. The RoDTEP rates will be decided after industry consultations and that would take 6-8 months, Goyal said. An audit and monitoring mechanism will be put in place for the scheme.