RoDTEP (Remission of Duties and Taxes on Exported Products)

By Manu Rao | Updated March 2026

What Is RoDTEP?

RoDTEP — Remission of Duties and Taxes on Exported Products — is an Indian government export incentive scheme that reimburses exporters for embedded taxes and duties that are not refunded through any other existing mechanism. These include taxes on fuel used in transportation, electricity duties, mandi (agricultural market) taxes, stamp duties on export documentation, and other levies that become embedded in the cost of exported goods.

RoDTEP replaced the older Merchandise Exports from India Scheme (MEIS) with effect from January 1, 2021. While MEIS provided a percentage-based incentive calculated on FOB (Free on Board) export value, RoDTEP is designed to reimburse actual embedded taxes — making it WTO-compliant under the Agreement on Subsidies and Countervailing Measures.

The scheme is administered by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry, with refunds processed through the customs authorities (CBIC).

Legal Framework

• Section 51B of the Customs Act, 1962 — Inserted by the Finance Act, 2020. Provides the statutory basis for remission of duty or tax on exported goods, as notified by the Central Government
• Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 — Tangentially relevant as RoDTEP interacts with preferential origin requirements
• DGFT Notification No. 19/2015-2020 (August 17, 2021, as amended) — Notified the RoDTEP rates and schedule of eligible products
• CBIC Circular No. 21/2021-Customs — Operational guidelines for claiming RoDTEP through the ICEGATE system
• RoDTEP Committee Report (Sharma Committee, 2020) — The inter-ministerial committee chaired by Dr. G.K. Pillai that determined the embedded tax rates for each export tariff line

How RoDTEP Works

The mechanism is straightforward:

1. Eligible exports: The exporter ships goods covered under the RoDTEP schedule (identified by HS codes / ITC-HS tariff lines).
2. Shipping Bill declaration: The exporter declares the claim for RoDTEP on the Shipping Bill at the time of export, selecting the relevant scheme code.
3. Scroll generation: After the Export General Manifest (EGM) is filed and the Let Export Order (LEO) is issued, the customs system generates a credit scroll in the exporter's ICEGATE account.
4. Duty Credit Ledger: The RoDTEP credit is credited to the exporter's electronic duty credit ledger on the ICEGATE portal as a transferable Duty Credit E-Scrip.
5. Utilisation: The exporter can use the credit to pay customs duties on imports, or transfer/sell the credit to another importer through the ICEGATE platform.

RoDTEP Rates

Rates are specified as a percentage of FOB export value, with a cap per unit of export in many cases. The rates vary by product category:

The rates were last updated in August 2024, with the scheme extended through March 31, 2026. The government has indicated that a further extension (or a successor scheme) is under consideration for FY 2026-27.

Eligibility Criteria

To claim RoDTEP benefits, the following conditions must be met:

• The goods must be in the RoDTEP schedule: Not all exported goods are covered. The DGFT publishes a detailed schedule with 8-digit ITC-HS codes. Products not in the schedule are ineligible.
• Exports must be through customs channels: Goods exported through the regular Shipping Bill process. Exports by post or courier above the threshold require Shipping Bills.
• No double benefit: Products already availing benefits under other duty remission schemes (Advance Authorisation, DFIA, or EOU scheme for the same levies) cannot claim RoDTEP on the same shipment. However, GST refund (IGST rebate or drawback) can be claimed alongside RoDTEP, as RoDTEP covers non-GST embedded taxes.
• The exporter must have a valid IEC: Import Export Code is mandatory.
• No exports to SEZs: Supplies to SEZs are treated as deemed exports and are not eligible for RoDTEP.
• Re-exports: Goods imported and re-exported without substantial transformation are not eligible.

RoDTEP vs. Earlier Schemes

How This Affects Foreign Investors in India

Foreign investors setting up manufacturing or trading companies in India for export should understand RoDTEP for several reasons:

Cost Competitiveness

Embedded taxes that are not refunded increase the cost of Indian exports by 1-4% compared to countries with more efficient tax refund mechanisms. RoDTEP partially addresses this gap. When building a business case for an Indian manufacturing subsidiary, factor RoDTEP credits into the export margin calculation.

Export-Oriented Manufacturing

If a foreign investor sets up a wholly owned subsidiary in India to manufacture goods for export — for instance, an auto component factory supplying to the parent company's global supply chain — RoDTEP credits can reduce the effective export cost. For a factory exporting INR 100 crore annually with a 2% RoDTEP rate, that is INR 2 crore in annual duty credits.

Interaction with Other Incentives

Foreign investors often combine RoDTEP with:

• PLI (Production Linked Incentive) schemes: PLI and RoDTEP are separate and can be claimed simultaneously on eligible products.
• Advance Authorisation / DFIA: Importers of raw materials for export manufacturing can use Advance Authorisation (duty-free import of inputs) alongside RoDTEP (refund of embedded domestic taxes on the finished export).
• SEZ benefits: Companies in SEZs are generally not eligible for RoDTEP, as SEZ units already enjoy customs and tax exemptions. This is an important consideration when choosing between SEZ and DTA (Domestic Tariff Area) manufacturing.

Transfer Pricing Considerations

RoDTEP credits received by the Indian subsidiary affect its profitability. For transfer pricing purposes, the credits should be treated as operating income (or other income, depending on the company's functional profile). Ensure your TP documentation accounts for RoDTEP to avoid disputes during TP audits.

Common Mistakes

• Not declaring RoDTEP on the Shipping Bill. The claim must be made at the time of export. You cannot retrospectively claim RoDTEP on shipments where the scheme was not declared on the Shipping Bill. Train your customs clearing agent to check the RoDTEP box.
• Claiming RoDTEP and Advance Authorisation on the same embedded taxes. While both can be used for the same export consignment, they cover different taxes. Advance Authorisation covers customs duties on imported inputs; RoDTEP covers embedded domestic taxes. Overlap is prohibited.
• Ignoring the per-unit cap. Many exporters calculate RoDTEP as a simple percentage of FOB value without checking the per-unit cap. For high-value, low-weight products, the cap often bites, reducing the effective benefit.
• Not monitoring scheme expiry dates. RoDTEP rates and product coverage are periodically revised. The current schedule runs through March 2026. Exporters who do not track extensions risk missing the claim window.
• Selling E-Scrips at steep discounts. RoDTEP Duty Credit E-Scrips are tradeable, but some exporters sell them at 90-92 paise per rupee to brokers. If your company also imports goods, use the credits directly for a full rupee-for-rupee benefit.

Practical Example

GreenThread Pvt Ltd is a garment exporter in Tirupur, Tamil Nadu. The company is a wholly owned subsidiary of GreenThread GmbH (Germany) and exports knitted cotton T-shirts (HS Code 6109.10.00) to the parent company for European distribution.

In FY 2025-26:

• Total FOB export value: INR 40 crore
• RoDTEP rate for HS 6109.10.00: 3.8% of FOB, capped at INR 12 per piece
• Total pieces exported: 20 lakh

Calculation:

• 3.8% of INR 40 crore = INR 1.52 crore
• Per-unit check: INR 1.52 crore / 20 lakh pieces = INR 7.60 per piece (below the cap of INR 12)
• RoDTEP credit received: INR 1.52 crore

GreenThread India uses INR 80 lakh of the credit to pay customs duties on imported fabric (where it does not use Advance Authorisation) and sells the remaining INR 72 lakh in E-Scrips through the ICEGATE platform at 97 paise per rupee, realising INR 69.84 lakh.

Total financial benefit: INR 80 lakh (duty offset) + INR 69.84 lakh (sale of scrips) = INR 1.4984 crore — effectively a 3.75% boost to the export margin.

Key Takeaways

• RoDTEP reimburses embedded taxes (fuel, electricity, mandi tax, stamp duty) that are not covered by GST refunds or customs drawback
• It replaced MEIS from January 2021 and is designed to be WTO-compliant
• Rates range from 0.5% to 4.3% of FOB value, with per-unit caps on many products
• Claims must be declared on the Shipping Bill at the time of export — no retrospective claims
• E-Scrip credits can be used for customs duty payment or sold to other importers
• SEZ units are not eligible for RoDTEP
• The scheme is currently in effect through March 2026 — extension is expected but not yet notified
• Foreign investors in export-oriented manufacturing should factor RoDTEP into their cost and margin projections

Setting up an export-oriented manufacturing operation in India? Beacon Filing helps foreign investors navigate RoDTEP, IEC registration, and export compliance to maximise duty refund benefits.