RoDTEP

RoDTEP: complete guide

Introduction

RoDTEP stands for Remission of Duties and Taxes on Exported Products. It is a scheme of the Government of India that refunds to exporters certain taxes, duties and levies that are built into the cost of exported goods but are not refunded under any other mechanism. The idea is simple: India should export goods, not taxes. If an exporter has paid embedded taxes such as duty on fuel used in transport, electricity duty, mandi tax, stamp duty on export documents or local levies on inputs, those costs make Indian goods less competitive abroad. RoDTEP returns a part of these costs to the exporter.

The scheme came into effect on 1 January 2021, replacing the earlier Merchandise Exports from India Scheme, which had been found to be inconsistent with India's commitments under international trade rules. RoDTEP is notified under the Foreign Trade Policy, administered by the Directorate General of Foreign Trade, and implemented by the Central Board of Indirect Taxes and Customs through the customs electronic data interchange system. Rebate rates and value caps are notified for each eligible export product by its tariff line, based on the recommendations of a committee that studies the embedded taxes in that product.

Unlike a cash refund, RoDTEP benefits are given as transferable duty credits in an electronic ledger maintained by customs. The exporter claims the benefit by making a declaration in the shipping bill at the time of export. After the export is completed and the export general manifest is filed, the claim is processed and a scrip is generated in the exporter's ledger. The scrip can be used to pay basic customs duty on imports or transferred electronically to another importer who needs it. Many exporters sell their scrips to importers to convert the benefit into cash.

The benefit can be meaningful, but it is easy to lose. The declaration must be made in each shipping bill, the exporter's account on the customs portal must be set up, scrips must be generated within the time allowed, and claims must be supported by records that customs may examine later. Rates and eligibility also change, and some categories of exporters, such as units in special economic zones and export-oriented units, have been brought in and out of the scheme over time. Professional help matters because missed declarations generally cannot be fixed easily and unclaimed scrips lapse. Our team checks whether your products are eligible, sets up your RoDTEP ledger, reviews shipping bill declarations, tracks scrip generation, helps you use or transfer scrips and keeps your records ready for verification. This page explains who can benefit, the legal requirements, the process, documents, timelines, how we price the work and what happens after scrips are issued.

Who Needs It

The RoDTEP scheme and our support services are relevant to:

• Manufacturer exporters. Businesses that make goods in India and export them under tariff lines notified in the RoDTEP schedule.
• Merchant exporters. Traders who buy goods from Indian manufacturers and export them can also claim RoDTEP, provided the goods are eligible and the conditions are met.
• Exporters shipping through any notified port. Claims are processed through the customs electronic system for exports from ports, airports, inland container depots and land customs stations where the system operates.
• Exporters using courier and postal channels. RoDTEP has been extended to certain exports through courier and postal modes, subject to the conditions notified, which is relevant for small exporters and e-commerce sellers.
• Units in special economic zones, export-oriented units and advance authorisation holders. These categories were excluded at first and have since been allowed to claim RoDTEP for certain periods through government notifications. Their eligibility depends on the notification in force, and we check the current position before claiming.
• Importers who buy scrips. Businesses that import goods can buy RoDTEP scrips from exporters and use them to pay basic customs duty, often at a discount to face value.

Some categories are not eligible, such as goods exported under certain prohibited or restricted categories, re-exported goods, goods manufactured in or exported from certain zones where the notification excludes them, and goods sold on deemed export basis. Products not listed in the RoDTEP schedule also do not qualify.

Key Benefits

• Lower effective export cost. The scheme refunds a part of the embedded taxes in exported goods, improving price competitiveness in foreign markets.
• Transferable scrips. RoDTEP credits are issued as electronic scrips that can be used to pay basic customs duty on imports or transferred to other importers, so even exporters who do not import can benefit.
• Automated processing. Claims are processed through the customs electronic system, with limited paperwork for routine shipments once the declaration is made correctly.
• Wide product coverage. The scheme covers a large number of tariff lines across sectors such as textiles, engineering goods, chemicals, agricultural products, leather and others.
• Consistency with trade rules. Because RoDTEP refunds actual embedded taxes rather than giving an incentive, it is designed to be consistent with international trade commitments, which reduces the risk of countervailing duties abroad.
• Works alongside drawback and GST refunds. RoDTEP covers taxes not refunded elsewhere, so it is claimed in addition to duty drawback and GST refunds on exports, subject to the rules.
• Improved cash flow. Selling scrips promptly turns the credit into working capital, which matters for small and medium exporters.

How the benefit is worked out. For each eligible tariff line, the government notifies a rate as a percentage of the free on board value of the export, and in many cases a value cap per unit of quantity. The benefit for a shipment is the lower of the amount produced by applying the rate to the free on board value and the amount produced by applying the cap to the quantity exported. Where the export is paid for in a currency other than rupees, the free on board value is converted at the rate notified by customs. Rates differ widely from one product to another, so correct classification of the goods is critical.

RoDTEP and duty drawback compared. Duty drawback refunds customs duties paid on imported inputs used to make exported goods, and in some cases central excise duty on certain fuels. RoDTEP refunds other embedded taxes and levies not covered by drawback or GST refunds, such as state taxes on fuel and electricity and local levies. An exporter can usually claim both on the same shipment if the goods are eligible for both.

Eligibility and Legal Requirements

The main requirements under the RoDTEP scheme are:

• Foreign Trade Policy and notifications. The scheme is provided for in the Foreign Trade Policy, with eligible products, rates and value caps notified in the schedule to the relevant notification. These notifications are revised from time to time.
• Implementation under customs law. The scheme is implemented through the Customs Act, 1962 and notifications issued by the Department of Revenue, including rules for issue of scrips, their use, transfer and recovery.
• Importer Exporter Code. The exporter must hold a valid Importer Exporter Code, linked to their PAN and updated each year as required by the Directorate General of Foreign Trade.
• Registration on the customs portal. The exporter must register on the customs electronic portal, with a Digital Signature Certificate, to create the RoDTEP credit ledger account.
• Declaration in the shipping bill. The exporter must declare in each shipping bill that they intend to claim RoDTEP for the eligible items. If the declaration is not made, the claim is generally not available for that shipment.
• Eligible goods and tariff lines. The goods must fall under a tariff line notified in the RoDTEP schedule, and must not fall in an excluded category.
• Realisation of export proceeds. Export proceeds must be realised within the time allowed under the Foreign Exchange Management Act, 1999. If they are not realised, the RoDTEP amount can be recovered with interest.
• Generation of scrips within time. Claims must be processed and scrips generated within the time allowed by the rules after the export general manifest is filed. Scrips not generated in time may lapse.
• Validity and use of scrips. Scrips are valid for a fixed period from the date of issue, as notified, and can be used to pay basic customs duty on imports. They cannot generally be used for other duties or taxes.
• Records and verification. Exporters must keep records of the inputs and taxes relevant to their exports for the period specified, since the authorities may verify claims, including through a risk-based system. Wrong claims can be recovered with interest and penalty.

The RoDTEP rates, eligible categories and procedures are revised frequently through notifications. We check the current requirements at the time of each claim.

Step-by-Step Guide

1. Initial consultation. We understand your products, export markets, ports, volume of shipments and whether you also use drawback, advance authorisation or other schemes. This tells us what benefits you can claim.
2. Classification and eligibility check. We review the tariff classification of each product and check it against the current RoDTEP schedule to confirm eligibility, the rate and any value cap.
3. Importer Exporter Code and portal setup. We check that your Importer Exporter Code is valid and updated, and help register your business on the customs portal with a Digital Signature Certificate to create the RoDTEP ledger.
4. Briefing your customs broker. We work with your customs broker or logistics provider so that the RoDTEP declaration is correctly made in every shipping bill for eligible items.
5. Shipping bill review. For ongoing engagements, we review shipping bills before or after filing to confirm the declaration, classification and values, and flag errors that need correction.
6. Tracking export general manifest filing. We track that the export general manifest has been filed by the carrier for each shipment, since claims are processed only after this.
7. Scrip generation. We help you generate RoDTEP scrips from the eligible shipping bills in your ledger within the time allowed, and check that the amounts match the expected benefit.
8. Using or transferring scrips. We help you use scrips against your own import duty, or transfer them to a buyer through the customs portal, following the transfer process and documentation.
9. Reconciling realisation. We reconcile shipments with export proceeds realisation records, so that any shortfall is identified and addressed before recovery proceedings arise.
10. Record keeping and responses. We help you maintain records for verification and respond to any queries, notices or recovery proceedings from customs.

Documents Checklist

The exact list depends on your business and shipments. Our team will confirm what applies before work begins.

Business registration documents:

• Importer Exporter Code certificate
• PAN of the business
• GST registration certificate
• Certificate of incorporation or partnership deed, where applicable
• Digital Signature Certificate of the authorised person
• Authorisation letter or board resolution for the authorised signatory

Product and shipment documents:

• List of products exported with their tariff classification
• Commercial invoices and packing lists
• Shipping bills filed for each export
• Export general manifest details, if available
• Bill of lading or airway bill
• Proof of realisation of export proceeds from the bank

For scrip transfer or use:

• Details of the buyer of scrips, including Importer Exporter Code
• Bill of entry details where scrips are used for own imports
• Agreement or invoice for sale of scrips, where applicable

For manufacturers, records of inputs and taxes:

• Purchase invoices for key inputs
• Records of fuel, electricity and other utility expenses
• Records of local taxes and levies paid, where available

How Long It Takes

Timelines depend on the volume of shipments and the state of your setup:

• Eligibility review and portal setup: usually 3 to 7 working days, depending on whether your Importer Exporter Code, digital signature and portal registration are already in order.
• Scrip generation for a shipment: once the shipping bill and export general manifest are filed, claims are usually processed within a few days, after which scrips can be generated in the ledger.
• Transfer of scrips: once a buyer is identified, the transfer on the portal can be completed within one to two working days.
• Review of past shipments: where we review a backlog of shipping bills to find unclaimed or ungenerated benefits, the time depends on the number of shipments, typically one to three weeks.
• Responses to queries or recovery notices: this depends on the nature of the query and the records available.

Because scrips must be generated within the time allowed after export, we recommend regular monthly reviews rather than an annual exercise.

Pricing

Pricing for RoDTEP is custom and is quoted after we review your export profile.

The fee depends mainly on:

• The number of products and tariff lines that need to be reviewed for eligibility
• Whether the engagement is a one-time setup, a review of past shipments or an ongoing monthly service
• The volume of shipping bills to be reviewed and scrips to be generated
• Whether we also help with transfer of scrips or use of scrips for imports
• Whether there are pending queries, notices or recovery proceedings from customs to address

Your quote will set out exactly what is included, typically the eligibility review, portal setup, broker briefing, shipping bill checks, scrip generation, transfer support and record keeping. Any charges levied by government departments, and fees of your customs broker or other third parties, are payable at actual and are not part of our professional fee. We confirm the full scope in writing before any work begins.

Common Mistakes to Avoid

• Not making the declaration in the shipping bill. The claim generally depends on the declaration made at the time of export. If your customs broker leaves it out, the benefit for that shipment may be lost.
• Wrong tariff classification. Rates are notified by tariff line. Classifying goods incorrectly can lead to a lower claim, or a claim that is later recovered with interest.
• Delaying scrip generation. Claims must be converted into scrips within the time allowed. Shipping bills left in the ledger for too long may lapse.
• Ignoring export proceeds realisation. If proceeds are not realised within the time allowed, the RoDTEP amount can be recovered with interest.
• Assuming every product is covered. Not all tariff lines are in the schedule, and some categories of exporters or goods are excluded.
• Letting scrips expire. Scrips have a limited validity. Unused scrips should be used or sold before they expire.
• Not keeping records. Customs may verify claims. Exporters who cannot show the basis of their claim or the export documents risk recovery and penalty.
• Overlooking changes in rates. Rates and caps are revised. Using old rates for pricing decisions can lead to wrong expectations about export margins.

What Happens After

Once scrips are issued in your ledger, several steps follow:

• Decide on use or sale. Use the scrips to pay basic customs duty on your own imports, or transfer them to another importer if you do not import.
• Complete transfers properly. Transfer scrips through the customs portal and keep records of the sale, including the buyer's details and the amount received, for accounting and tax purposes.
• Account for the benefit. RoDTEP benefits are generally treated as income for income tax purposes. Sale of scrips may also have GST implications based on the rules in force, which should be checked.
• Track validity. Monitor the expiry dates of unused scrips so that they are not lost.
• Monitor realisation. Make sure export proceeds are realised within the time allowed, and respond promptly to any notice for non-realisation.
• Keep records ready. Retain shipping bills, invoices, realisation certificates and input records for the period required, since claims may be verified later.
• Review rate changes. Track changes to RoDTEP rates and eligibility, especially for new products or new markets.

Our team can combine RoDTEP support with GST refund claims on exports, duty drawback and Importer Exporter Code updates, so your export incentives are claimed in an organised way.

FAQs

What does RoDTEP cover?

RoDTEP refunds embedded central, state and local taxes, duties and levies on exported goods that are not refunded under any other mechanism, such as taxes on fuel used in transport, electricity duty and certain local levies.

Is RoDTEP paid in cash?

No. The benefit is given as transferable duty credit scrips in an electronic ledger. Scrips can be used to pay basic customs duty on imports or transferred to another importer.

Can a merchant exporter claim RoDTEP?

Yes. A merchant exporter who exports eligible goods can claim RoDTEP, provided the declaration is made in the shipping bill and the other conditions are met.

Can I claim RoDTEP and duty drawback together?

Generally, yes. Duty drawback covers customs duties on imported inputs and some other duties, while RoDTEP covers other embedded taxes. Both can usually be claimed for the same shipment if the goods are eligible.

What if I forgot to claim RoDTEP in the shipping bill?

The declaration is a key condition for the claim. In some cases, amendment of the shipping bill may be possible through customs, but it is not assured and depends on the facts and the rules in force. It is much safer to get the declaration right at the time of export.

How long are RoDTEP scrips valid?

Scrips are valid for a fixed period from the date of issue, as notified by the government. Unused scrips lapse after that period, so they should be used or sold in time.

Are SEZ units eligible for RoDTEP?

Units in special economic zones and export-oriented units were excluded at the start of the scheme and later allowed for certain periods through notifications. Eligibility depends on the notification in force for the relevant period, which we check before claiming.

Is RoDTEP available for exports through courier?

RoDTEP has been extended to certain exports through courier and postal channels, subject to the notified conditions. Eligibility depends on the mode and the system in use at the relevant point of export.

Is RoDTEP income taxable?

Generally, yes. RoDTEP benefits are treated as income in the year they arise or are received, depending on the accounting method. We recommend discussing the treatment with your tax adviser.

Can I sell RoDTEP scrips?

Yes. Scrips can be transferred electronically on the customs portal to another importer, who uses them to pay basic customs duty. Exporters usually sell scrips at a discount to face value.

What happens if export proceeds are not realised?

If export proceeds are not realised within the time allowed under foreign exchange rules, the RoDTEP amount can be recovered with interest, unless the delay is condoned or an extension is obtained.

How are RoDTEP rates decided?

Rates are recommended by a committee that studies embedded taxes for each product and are notified by the government in a schedule by tariff line. Rates are reviewed and revised from time to time.

Do I need a separate registration for RoDTEP?

No separate licence is needed, but you must have a valid Importer Exporter Code and register on the customs electronic portal with a Digital Signature Certificate to create your RoDTEP ledger.

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