RoDTEP Scheme Explained: What Exporters Need to Know

India established the Remission of Duties and Taxes on Exported Products (RoDTEP) as a key export-promoting scheme that operates as one of its latest initiatives. The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme began operating in 2020 to support Indian exporting activities while raising international market competitiveness and streamlining exporter refunds. The RoDTEP scheme frees up taxes and duties that exist through the export and production cycle to enhance the international market appeal of Indian goods.

What is the RoDTEP scheme?

The RoDTEP scheme is an initiative by the Government of India to refund the indirect taxes and duties that exporters pay but do not receive refunds for under other schemes like MEIS (Merchandise Exports from India Scheme). The primary goal is to reduce the overall tax burden on exporters, which, in turn, should increase the competitiveness of Indian goods in the global marketplace.

Key Features of the RoDTEP Scheme:

Objective:

The scheme primarily refunds all taxes, duties, and levies that accumulate during both production and exports. The RoDTEP addresses a missing gap within export schemes since it refunds taxes and duties that other schemes frequently overlook.

Pro Tips: Claiming GST Refunds on Exports with an MYGST Refund Consultant for a Smooth Process. 

Taxes and Levies Covered:

The RoDTEP scheme refunds the embedded taxes, which consist of:

• Central Goods and Services Tax (CGST).
• Integrated Goods and Services Tax (IGST).
• Customs duties on imported inputs.

State and local taxes, along with VAT, fall under the coverage of this scheme.
The tax refund system helps exporters access tax decreases from fuel expenses, which were once unrecoverable.

Scope:

The program extends benefits to numerous export items within engineering goods, along with textiles and agricultural products. The framework works as an exporter compensation system that serves diverse export territories within India's export arena.

Read More: Duty Drawback Scheme for Export  

Refund Mechanism:

Exporters access an electronic system of the Indian Customs Department to file their refund claims. The payment refund takes the form of either a duty credit or a digital voucher. Exporters obtain these credits to perform tax and duty payments for imports, plus they maintain transferability to different organisations.

RoDTEP Rates:

The Government of India determines RoDTEP refund rates through the evaluation of Harmonised System (HS) Codes for each exported product. The government regularly updates the evaluation process, which determines the rates. The designated refund rates of RoDTEP function to cover most expenses that were embedded initially.

Eligibility Criteria:

Exporters who want to participate in the RoDTEP scheme must hold registration status with the Directorate General of Foreign Trade (DGFT) alongside following every export regulation. Products included within the Customs Tariff, together with additional announced goods, benefit from the refund program.

Implementation:

The RoDTEP scheme manages its operations through the DGFT authority, which enables the Customs Department to handle refunds. Export declarations from exporters serve as the starting point for the refund method.

Benefits of the RoDTEP Scheme:

• Boost to Export Competitiveness: RoDTEP allows exporters to receive tax reimbursements for embedded duties and taxes, which decreases their production expenses and boosts Indian product competitiveness abroad.
• Reduction of Tax Burden: Through this program, exporters gain relief on their financial matters because the scheme pays back taxes from manufacturing within the production chain, which former refund systems did not offer.
• Simplification of the Export Process: An electronic refund system simplifies every step of benefit claiming for exporters while simultaneously decreasing administrative expenses.
  Encouragement for Higher Exports: The government aims to boost export activities through tax reduction for exporters and manufacturers because they want to encourage higher participation in international markets.
• Increased Transparency: Electronic system implementation brings transparency to export refunds, thus facilitating better transactions.

RoDTEP vs. MEIS:

RoDTEP serves as an alternative to the former Merchandise Exports from India Scheme (MEIS) that provided Free on Board (FOB) value-based export promotion incentives until its retirement. The RoDTEP scheme extends benefits to embedded duties, whereas MEIS does not offer this coverage. RoDTEP provides a more thorough reaction to tax burdens since it addresses the issues not supported by other export schemes.

Compliance under the RoDTEP Scheme:

Exporters need to maintain compliance through two steps.

• Exporters need to state their reason for RoDTEP benefit utilisation through the Shipping Bill declaration.
• Exporters need to submit their Annual RoDTEP Return through the DGFT Portal. All financial year claims through the Annual Return for Recovery of Domestic Tax and Duty must be submitted before the 31st of March following the financial year.

Resource: List of Relevant Notifications, Public Notices, and Trade Notices issued by DGFT The Directorate General of Foreign Trade (DGFT) has issued several notifications, public notices, and trade notices regarding the implementation and updates to the RoDTEP scheme. Below is a list of the 10 important resources for exporters:

These notifications and notices provide updates on deadlines, filing procedures, and updates to the scheme's rules. Exporters should stay updated with the DGFT's official website to ensure they comply with the latest regulations.

Pro Tip: Use our GST Refund Calculator to easily calculate your refund and simplify the GST process. Whether you want to know your refund amount or check its status, our tool makes it simple to know your GST refund quickly and accurately.

Conclusion:

Through its implementation, the RoDTEP scheme helps to enhance India's export competitiveness on the global market. The scheme plans to eliminate embedded taxes plus levies, which will support both exporter financial relief and the Indian export industry's global market share. The scheme supports the overall “Make in India” initiative of the government as it works toward creating economic expansion. The RoDTEP scheme creates better exporting outcomes by implementing straightforward procedures combined with clear transparency and focused assistance.

Frequently Asked Questions

What is the RoDTEP scheme?
A refund of non-taxable duties and export duties operates through the RoDTEP (Remission of Duties and Taxes on Exported Products) scheme. It provides a refund of central in addition to state and local taxes that include fuel VAT and electricity duties for exporting Indian products worldwide.

How do I claim my RoDTEP benefits?
To claim RoDTEP benefits, declare your intent in the shipping bill, register on the ICEGATE portal using a Digital Signature Certificate (DSC), ensure your products are eligible, and provide export details. Benefits are credited to your RoDTEP ledger for use or transfer.

What is the incentive rate for RoDTEP?
The RoDTEP incentive rates apply to different products depending on their sector and provide benefits ranging from 0.3% to 3.9% of the export value at FOB. The government reviews incentive rates regularly through their periodic assessments based on product categories and sector preferences that also use budget funds designated for RoDTEP benefits.

How to calculate the RoDTEP amount?
To calculate the RoDTEP benefit, multiply the FOB value of the export by the applicable incentive rate. For example, if the FOB value is ₹100,000 and the rate is 1%, the benefit would be ₹1,000. Eligibility is based on product classification.

What is the time limit for RoDTEP?
RoDTEP operates until September 30, 2025 for Domestic Tariff Area units and continues until December 31, 2025 for both Advance Authorisation units and Export Orientated Units and Special Economic Zones. The established deadlines give exporters an opportunity to request their benefits from the scheme.