The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, introduced in January 2021 as a WTO-compliant replacement for the MEIS, commits to refunding taxes and duties embedded in the export supply chain that are neither included in GST ITC nor covered by duty drawback. This includes state-level taxes on electricity, fuel, local levies, and embedded duties on non-creditable inputs. The scheme is theoretically comprehensive. In practice, it is heavily under-utilised because the rate schedule (a product-specific table published by the CBIC) is complex, the scrip mechanism for claiming benefits requires careful operational management, and the audit trail required by CBIC for high-value claims is demanding.
RoDTEP Legal Basis
Foreign Trade Policy 2023, Chapter 4 — RoDTEP Scheme. The scheme is administered through the GST/Customs portal with scrips issued to the importer's IEC. Rates notified via Customs Notification No. 76/2021-Customs (NT) and subsequent amendments. Rate ranges from 0.3% to 4.3% of FOB value depending on product HS Code.
Statutory Reference
RoDTEP vs. Duty Drawback — Key Differences
What It Covers
RoDTEP: Taxes not covered by GST ITC (state levies, electricity tax, fuel taxes embedded in manufacturing). Drawback: Customs duty and central excise duty paid on inputs used in exported goods.
Rate Determination
RoDTEP: Fixed rate per product HS code — not based on actual tax paid. Drawback: Both a fixed All Industry Rate (AIR) and a Brand Rate (based on actual input duty paid) are available.
Scrip/Credit Mechanism
RoDTEP: Electronic scrips issued in IEC — used to offset import duty payable or transferable to another exporter. Drawback: Cash payment to exporter's bank account within 30 days of Let Export Order.
Many exporters check RoDTEP once at scheme launch, see rates of 0.5–1.5% and dismiss it. On ₹50 crore of annual exports, a 1% RoDTEP benefit is ₹50 lakh — transferred as a scrip. That scrip pays import duty on your own materials. It is worth implementing.
— Sami Tax Customs Advisory, November 2024
RoDTEP Maximisation Steps
- Run a product-by-product rate lookup against your export HS codes in the RoDTEP rate schedule (available on DGFT website).
- Verify your Shipping Bills are correctly flagging RoDTEP eligibility — the system marks each Bill "Claim" or "No Claim" and an incorrect "No Claim" flag means the benefit is permanently lost for that shipment.
- For high-value product categories (textiles, chemicals, auto components) where RoDTEP rates exceed 2%: consider whether a Brand Rate application for Duty Drawback makes additional sense alongside RoDTEP.
- For exporters whose primary import duty burden has declined (due to FTA usage): explore whether RoDTEP scrips can be transferred to third-party importers for cash consideration.
- Sami Tax helps exporters with ₹10 crore+ annual turnover build an annual RoDTEP benefit tracking and scrip management programme.