Centre mulls revival of RoDTEP benefits for sugar exports

The Remission of Duties and Taxes on Export Products (RoDTEP) scheme, launched in January 2021, is aimed at ensuring that no domestic taxes are added on to goods’ shipments meant for export. Authorities had denied benefits under the scheme to sugar exporters after the sweetener was removed from the ‘free’ category in June 2022 as a pre-emptive measure to boost domestic availability and avoid a spurt in prices.

The government is trying to work out a mechanism to bestow tax remission benefits on exports of sugar, which had been placed in the ‘restricted’ category in mid-2022, and is considering a demand from tea exporters to raise their tax remission rates.

The Remission of Duties and Taxes on Export Products (RoDTEP) scheme, launched in January 2021, is aimed at ensuring that no domestic taxes are added on to goods’ shipments meant for export. Authorities had denied benefits under the scheme to sugar exporters after the sweetener was removed from the ‘free’ category in June 2022 as a pre-emptive measure to boost domestic availability and avoid a spurt in prices.

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“Any item which is restricted is not entitled for the RoDTEP benefits. So once sugar was brought into the restricted list, it has been prevented from getting RoDTEP,” a senior Commerce Ministry official told The Hindu.

“The sugar industry has appealed to the Department of Food and Public Distribution to change the nature of the restriction and bring it back to the free category along with other riders, like seeking permissions from the Directorate of Sugar for exports. So once the Department of Food takes a decision, we will see what kind of notification can be effected to restore the RoDTEP benefits,” the official added.

Earlier this month, the Gujarat High Court noted that the government had allowed the export of sugar from time to time based on specific permissions and held that those shipments should be considered eligible for the RoDTEP benefits. The court had underlined that a distinction was warranted between goods whose exports are restricted altogether, and those that are restricted with conditions.

“If the government means to restore these tax remissions to sugar players, it may need to create a fresh category for merchandise exports, going beyond the present ones of ‘free’ and ‘restricted’, to denote that certain exports are permitted on a conditional basis,” said Abhishek Rastogi, founder of Rastogi chambers, who represented the sugar industry in the Gujarat High Court case.