REMISSION OF DUTIES AND TAXES ON EXPORTED PRODUCTS (RoDTEP)
1.1 What is the RoDTEP Scheme
RoDTEP, the acronym for the Scheme for Remission of Duties and Taxes on Exported Products, is the principal export rebate scheme operating in India today. It was announced by the Hon’ble Union Finance Minister in the Budget Speech of 2020-21. The scheme guidelines were thereafter notified by the Directorate General of Foreign Trade vide Notification No. 19/2015-2020 dated 17 August 2021, and the operative customs procedure was put in place by the Central Board of Indirect Taxes and Customs (“CBIC”) through Notifications No. 75/2021-Customs (N.T.) and No. 76/2021-Customs (N.T.) both dated 23 September 2021. The scheme has, however, been operative for exports from 1 January 2021.
The objective of the scheme, as recorded in paragraph 4.54 of the Foreign Trade Policy, is to refund — to the eligible exporter — those duties, taxes and levies, at the Central, State and local level, which are borne on the exported product but are not exempted, remitted or credited under any other scheme. The remission extends both to taxes on inputs used in the manufacture of the exported product and to taxes on the distribution of the exported product. By design, RoDTEP is not a fresh incentive in the nature of MEIS. It is a remission of pre-existing tax incidence and it expressly does not extend to duties already covered by Drawback, IGST refund, or any other rebate.
1.1.1 The remission rationale
Indian exports continued to suffer the burden of several un-rebated taxes even after the introduction of GST in July 2017. State VAT on diesel, petrol and aviation turbine fuel used in the production and distribution of exported goods, mandi tax on agricultural inputs, electricity duty, stamp duty on shipping bills and other export documentation, embedded SGST and CGST on inputs procured from unregistered dealers (and on specified petroleum-based inputs which remain outside the GST chain), and the central excise duty on coal used for captive power generation all of these constitute embedded incidences that no other scheme rebates. RoDTEP is the vehicle by which these residual burdens are sought to be neutralised, in keeping with the international principle of zero-rating exports.
1.1.2 How RoDTEP differs from MEIS
It is helpful to set out, at the outset, the key differences between the predecessor MEIS scheme and RoDTEP: MEIS RoDTEP
Was an incentive linked to the FOB value of exports without reference to actual tax incidence.
Was held to be a prohibited export subsidy under Article 3.1(a) of the SCM Agreement by the WTO Panel.
Scrip could be used for payment of Basic Customs Duty, Additional Customs Duty (CVD) and other duties.
Operated outside the formal duty-credit-ledger framework of the Customs Act.
Is a remission of duties/taxes/levies actually borne on the export product but not rebated otherwise.
Is structured as a permitted remission/refund of input taxes — consistent with footnote 1 to Article 1.1(a)(1)(ii) of the SCM Agreement read with Annex I.
E-scrip can be used only for payment of Basic Customs Duty (BCD) on imports made through the Customs Automated System.
Operates within Section 51B of the Customs Act, 1962 — duty credit is maintained in the Electronic Duty Credit Ledger.
MEIS
Validity of scrip was 24 months.
RoDTEP
Validity of e-scrip is 12 months from the date of generation. Scrip was transferable in parts.
E-scrip is transferable only in entirety; partial transfer is not permitted.
1.1.3 Eligibility — Who can claim RoDTEP
Subject to the express exclusions discussed under paragraph 4.55 of the FTP (and tabulated in Notification 76/2021-Customs (N.T.)), every exporter holding a valid Importer Exporter Code (IEC) and exporting goods classifiable under one of the tariff lines listed in Appendix 4R or Appendix 4RE of the Handbook of Procedures is eligible to claim RoDTEP. The benefit is available to:
• Manufacturer-exporters and merchant-exporters alike;
• Exporters operating under the regular Domestic Tariff Area regime;
• With effect from 11 March 2024, exporters operating under the Advance Authorisation (except deemed exports), EOU and SEZ schemes, in respect of the 8,000+ tariff lines covered by the original Appendix 4R and the additional 166 tariff lines specified in DGFT Notification No. 74/2023 dated 11 March 2024 — these AA/EOU/SEZ-eligible items being now consolidated in Appendix 4RE.
1.1.4 Ineligible categories
Paragraph 4.55 of the FTP, mirrored in Table-1 of Customs Notification 76/2021-Cus (N.T.), excludes the following categories from the scheme:
• Export of imported goods covered under paragraph 2.46 of the FTP;
• Exports through trans-shipment, that is, exports originating in a third country but trans-shipped through India;
• Export products subject to Minimum Export Price or export duty;
• Products which are restricted or prohibited for export under Schedule 2 of the Export Policy in ITC (HS);
• Deemed exports;
• Supplies of products manufactured by DTA units to SEZ/FTWZ units;
• Products manufactured in EHTP and BTP units;
• Products manufactured partly or wholly in a warehouse under section 65 of the Customs Act, 1962 (MOOWR units);
• Products manufactured or exported in discharge of export obligation against an Advance Authorisation, Duty Free Import Authorisation or Special Advance Authorisation — except, where covered by Appendix 4RE w.e.f. 11 March 2024;
• Products availing the benefit of Notification No. 32/1997-Customs dated 1 April 1997 (jobbing imports);
• Exports for which electronic documentation has not been generated in ICEGATE EDI; exports from non-EDI ports;
• Goods which have been taken into use after manufacture.
1.1.4.1
Ineligible categories - Restricted vs. Prohibited
High courts have clarified that “restricted” exports do not equate to “prohibited” exports. When the government issues a quota and grants specific permission to export, the underlying transaction remains conducive to national interest and qualifies for export promotion benefits.
The Bombay High Court (following prior rulings by the Gujarat High Court) in M/s Shree Renuka Sugars Ltd. v. Union of India (Bombay High Court) Special Civil Application No. 2186 of 2023 decided on 13th April 2023) upheld the eligibility for RoDTEP incentives on white refined sugar exports. The Court determined that since the State sanctioned the shipments and issued the requisite export permissions, the shipments could not be disqualified from the incentive merely because the sugar’s classification was shifted to “restricted.”
The Supreme Court in Union of India v. HRMM Agro Overseas Pvt. Ltd. (2024) 21 Centax 174 (S.C.) has held that Rebate under RoDTEP Scheme for duty credit is admissible notwithstanding shifting of sugar export from free to restricted category if export was made with specific permission of Director of Sugar.
1.1.5 Rates of Remission – Appendix 4R and 4RE
Appendix 4R is the principal rate schedule under the RoDTEP scheme. It is organised tariff-line-wise (at the 8-digit ITC(HS) level), and for each tariff line specifies:
i. The “RoDTEP Code” - a unique code assigned to the tariff line for scheme purposes;
ii. The description of the goods;
iii. The rate of remission as a percentage of the FOB value;
iv. The per-unit value cap, where applicable, expressed in Rupees per kilogram, per metre, per piece or other unit.
The rates are deliberately modest - in keeping with the conceptual design of refunding only embedded taxes - and typically range from 0.3% to 4.3% of FOB value, with most rates clustered in the 0.5% to 2.5% range. Certain sectors with high tax incidence (such as marine products with significant fuel input, or processed agricultural products) attract relatively higher rates.
The methodology for rate-fixation, as articulated in the RoDTEP Committee Reports, is to calculate sector-wise and product-wise:
i. The embedded SGST/CGST on inputs not under GST chain (notably petroleum products outside GST and certain agricultural inputs);
ii. The Central Excise duty on fuel used in transportation of inputs and outputs;
iii. The State VAT on fuel;
iv. Mandi tax/market cess;
v. Electricity duty/electricity cess;
vi. Stamp duty on export documentation and bill of lading;
vii. Any other Central, State or local tax/duty not otherwise refunded.
The cumulative embedded tax incidence is then expressed as a percentage of the FOB value to arrive at the notified rate.
Appendix 4RE, introduced in March 2024 for AA/EOU/SEZ exporters, generally provides for lower rates than Appendix 4R - on the rationale that such exporters already enjoy duty exemption on imported inputs and therefore have a lower residual embedded-tax burden. The 4RE schedule also has tighter per-unit value caps and is subject to a separate, capped budgetary allocation.
1.1.5.1 Rates of Remission – Per unit value caps and ceilings
In addition to the percentage rate, the RoDTEP schedule generally specifies a per-unit value cap - a maximum amount of remission per unit of export. The unit of measurement varies by product: per kilogram for most commodities, per piece for finished goods, per metre for textiles, per litre for liquids, and so on.
The rationale for the per-unit cap is two-fold:
(a) To prevent windfall gains where the FOB value is unusually high (for example, due to a temporary spike in international prices or because of intra-group pricing) and the percentage rate would result in a remission exceeding the actual embedded tax incidence; and
(b) To impose an aggregate budgetary discipline on the scheme.
The cap operates as follows:
i. the entitlement per shipping bill is the lower of :
(a) the percentage rate applied to the FOB value, and
(b) the per-unit cap multiplied by the quantity exported.
The cap operates line-wise, not in aggregate, so each tariff-line item in a shipping bill is independently subject to its applicable cap.
The administrative caps are critical: the overall RoDTEP budget is fixed annually, and the per-unit caps are calibrated to ensure that aggregate claims do not exceed the budgetary outlay. In years where claims have threatened to exceed the outlay, the Government has invoked the proviso to revise rates downward; in years of under-utilisation, certain sectors have been added or rates revised upward.
Importance
of Value Caps
In many sectors, per-unit value caps have been imposed to prevent excessive remission.
Illustration:
1.2 How the RoDTEP Scheme can be Availed
The procedural cadence of a RoDTEP claim from the moment a shipping bill is presented to the moment the exporter discharges customs duty by using the e-scrip is structured around the Customs Automated System and the Electronic Duty Credit Ledger Regulations, 2021. The principal steps are summarised below:
1.2.1
Step 1 — Pre-condition: registration of IEC and AD code on ICEGATE
Only an exporter holding a valid IEC number and having registered the IEC, the bank Authorised Dealer (AD) code and digital signature on ICEGATE can file a shipping bill claiming RoDTEP. An electronic ledger is created on ICEGATE for every IEC holder who is either the exporter making the claim or the recipient of duty credit by way of transfer.
1.2.2 Step 2 — Declaration on the Shipping Bill
At the time of filing the shipping bill (or bill of export, in the case of an export by land), the exporter is required to make a declaration at item level under the RoDTEP scheme. Two declarations are mandatory:
• RODTEPY/RODTEPN — to indicate ‘yes’ or ‘no’ for the claim. RODTEPN must be selected if the exporter does not wish to claim RoDTEP for that specific item;
• Confirmation that the exporter undertakes to abide by the scheme provisions, that no rebate or remission has been claimed in respect of the duties, taxes or levies covered by RoDTEP under any other scheme, and that records will be preserved for purposes of audit.
Filing of the declaration is treated as a request for the rebate. A claim cannot be filed by way of an amendment to the shipping bill or by post-shipment supplementary application. The claim must originate at the time of filing the shipping bill.
Procedural Leniency: Authorities cannot reject RoDTEP claims simply because the exporter omitted to declare the scheme on their Shipping Bills at the time of filing. Courts have permitted retroactive applications to ensure exporters receive their legitimate remissions.
M/S Satyendra Packaging Limited v. Union of India (Gujarat High Court) (2023) 13 Centax 251 (Guj.): In a case that set a vital precedent for missed RoDTEP declarations, the Court ruled that exporters who did not mention the RoDTEP scheme in their initial Shipping Bills are still permitted to apply for the benefit. The Court established that the passage of time does not render these claims time-barred, and failure to declare the scheme initially does not constitute a waiver of the exporter’s rights. The SLP filed by the department before the Hon’ble Supreme Court was dismissed in (2024) 20 Centax 471 (S.C.).
The Gujarat High Court in Shri Niwas Dall And Besan Mill v. Union if India (2024) 23 Centax 201 (Guj.) has held that where exporter’s request for shipping bills correction to claim benefit of Remission of Duties and Taxes on Exported Products Scheme was allowed by way of doing manual correction, said benefit could not be denied on ground that Customs EDI system did not allow online amendment after completion of export and filing of Export General Manifests.
The Gujarat High Court in Ball Aerosol Packaging India Pvt. Ltd. v. Union of India (2024) 25 Centax 29 (Guj.) has held that where due to oversight shipping bill was processed in EDI system without selecting ‘YES’ for Merchandise Exports from India Scheme, amendment to shipping bill after export of goods had to be allowed as requirements of proviso of Section 149 of Customs Act, 1962 were satisfied.
1.2.3
Step 3 — Processing through the Risk Management System
Once the Let Export Order under section 51 of the Customs Act, 1962 is granted and the export manifest or export report is filed under section 41, the system processes the RoDTEP claim. The processing is risk-based. The architecture follows that of duty drawback claims, in respect of which CBIC Circular No. 15/2021-Cus dated 15 July 2021 lays down the implementation framework for the Risk Management System. Claims that are not picked up for verification by the RMS proceed for sanction in the ordinary course. Claims that are picked up are referred to the proper officer for examination of supporting documentation.
1.2.4 Step 4 — Generation of the Scroll
On successful processing, the system generates a RoDTEP scroll. The scroll is a customs document that lists the shipping bills processed and the duty credit allowed against each, by item. It is the digital equivalent of a sanctioned drawback scroll. The scroll is issued by the Customs Automated System and is, in principle, generated periodically.
1.2.5
Step 5 — Generation of the e-Scrip
The exporter has the option, within one year of generation of the scroll, to combine duty credits from one or more scrolls at a particular customs station of export and convert them into an e-scrip — a duty credit instrument resident in the exporter’s electronic ledger. Where the exporter does not exercise this option, the system itself, at the end of the one-year window, will combine the available duty credits Customs-station-wise and issue an e-scrip in the exporter’s ledger.
Each e-scrip carries a unique identification number and the date of its creation. On creation, it is automatically registered with the Customs station of export.
1.2.6 Step 6 — Use or Transfer of the e-Scrip
An e-scrip may be used by the exporter for payment of Basic Customs Duty (BCD) under the First Schedule to the Customs Tariff Act, 1975, on any imports made through the Customs Automated System. It may, alternatively, be transferred to another IEC holder. Two important constraints apply:
• Use limited to BCD: the e-scrip cannot be used for payment of IGST, Social Welfare Surcharge, Antidumping Duty or any other duty other than BCD.
• Transfer of the entire amount: duty credit available in an e-scrip can be transferred only at one go for the entire amount available in the said e-scrip; partial transfer is not permitted.
The validity of the e-scrip is one year from the date of its creation, and the validity period does not change on account of transfer. Any duty credit remaining unutilised at the end of one year shall lapse and there is no extension or revalidation mechanism.
No levy of GST on transfer of duty credit scripts
The Authority for Advance Rulings, Uttar Pradesh in Re: BVN Traders (2023) 9 Centax 8 (A.A.R. - GST - U.P.) has held that duty credit scrip issued under ‘Rebate of State and Central Taxes and Levies’ (RoSCTL) Scheme being instruments to award incentives to exporters with objective of export promotion by allowing them to set off basic customs duty against it, duty credit scrips are exempted from GST. Exemption is available to all duty credit scrips excluding ineligible scrips.
Turnover of duty credit script to be excluded from adjusted turnover for claiming refund of GST-ITC on zero rated supplies
The Authority of Advance Ruling, Telangana in Re: Kaveri Exports (2023) 8 Centax 115 (A.A.R. - GST - Telangana), has held the following:
• With effect from 5-7-2022, value of ‘Duty credit scrips’ will not form part of value of exempt supplies for purpose of computation of reversal of input tax credit.
• Duty Credit scrips used for clearing imports are exempt from GST; thus, turnover pertaining to sale of ‘Duty credit scrips’ should be reduced from total turnover for computation of ‘Adjusted Total Turnover’ as per rule 89(4) of CGST Rules’, 2017.
• Turnover from sale of ‘Duty credit scrips’ is not relevant for calculating refund of input tax credit on exported goods received.
1.2.7 Step 7 — Realisation of sale proceeds
The grant of duty credit is conditional upon the exporter realising the sale proceeds, in respect of the relevant export, within the period allowed under the Foreign Exchange Management Act, 1999. If the proceeds are not realised within the said period (or any extension thereof granted by the Reserve Bank of India), the duty credit is deemed never to have been allowed, and the exporter is liable to repay the credit, along with interest under section 28AA of the Customs Act. Partial non-realisation results in a proportionate recovery.
Conversion of shipping bill from one promotion scheme to another promotion scheme
The CBIC vide Circular No. 36/2010-Cus dated 23-09-2010 has provided a clarification with regard to conversion of free shipping bills to Advance Authorisation/DEPB/Drawback shipping bills and from one export promotion scheme to another. The operative part of the Circular reads as under: Para 3
It is clarified that Commissioner of Customs may allow conversion of shipping bills from schemes involving more rigorous examination to schemes involving less rigorous examination (for example, from Advance Authorization/DFIA scheme to Drawback/DEPB scheme) or within the schemes involving same level of examination (for example from Drawback scheme to DEPB scheme or vice versa) irrespective of whether the benefit of an export promotion scheme claimed by the exporter was denied to him by DGFT/DOC or Customs due to any dispute or not.
The conversion may be permitted in accordance with the provisions of section 149 of the Customs Act, 1962 on a case-to-case basis on merits provided the Commissioner of Customs is satisfied, on the basis of documentary evidence which was in existence at the time the goods were exported, that the goods were eligible for the export promotion scheme to which conversion has been requested. Conversion of shipping bills shall also be subject to conditions as may be specified by the DGFT/MOC. The conversion may be allowed subject to the following further conditions:
(a) The request for conversion is made by the exporter within three months from the date of the Let Export Order (LEO).
(b) On the basis of available export documents etc., the fact of use of inputs is satisfactorily proved in the resultant export product.
(c) The examination report and other endorsements made on the shipping bill/export documents prove the fact of export and the export product is clearly covered under relevant SION and or DEPB/Drawback Schedule as the case may be.
(d) On the basis of S/Bill/export documents, the exporter has fulfilled all conditions of the export promotion scheme to which he is seeking conversion.
(e) The exporter has not availed benefit of the export promotion scheme under which the good’s were exported and no fraud/ misdeclaration/manipulation has been noticed or investigation initiated against him in respect of such exports.
Para 4
Free shipping bills (shipping bills not filed under any export promotion scheme) are subject to ‘nil’ examination norms. Conversion of free shipping bills into EP scheme shipping bills (advance authorization, DFIA, DEPB, reward schemes etc.) should not be allowed. However, the Commissioner may allow All Industry Rate of duty drawback on goods exported under free shipping bill, without conversion of such free shipping bill to Drawback Scheme shipping bill, in terms of the proviso to rule 12(1) (a) of the Customs, Central Excise and Service Tax Drawback Rules, 1995.
Para 5
Due care may be taken while allowing conversion to ensure that the exporter does not take benefit of both the schemes i.e. the scheme to which conversion is sought and the scheme from which conversion is sought. Whenever conversion of a shipping bill is allowed, the same should be informed to DGFT so that they may also ensure that the exporter does not take benefit of both the schemes.
1.2.8 Step 8 — Annual Compliances & Document retention
Exporters are required to maintain, for a period of five years, all documents relating to the RoDTEP claim including shipping bills, invoices, packing lists, export realisation evidence, evidence of duties/taxes borne on inputs, and any correspondence with the RoDTEP Committee. The Risk Management System will draw samples for physical verification, and the exporter must furnish the records on demand.
With effect from 11 April 2024, the Directorate General of Foreign Trade has, by Public Notice No. 06/2024-25 dated 11 April 2024 (read with Notification No. 03/2024-25 of the same date), introduced an annual self-disclosure obligation in the form of the RoDTEP Annual Return (“RAR”). The framework, set out in the newly-inserted paragraph 4.94 of the Handbook of Procedures, 2023 read with Para 4.96 thereof, applies to every exporter (identified by IEC)
whose aggregate RoDTEP claim across all 8-digit HS Codes exceeds Rs. 1 crore in a financial year. Such exporters are required to file the RAR online on the DGFT portal — under the “RoDTEP” module → “Annual Return” menu — within the time stipulated by DGFT (the due date for FY 2023-24 was, after a series of extensions effected through subsequent Public Notices, deferred to 30 June 2025). The return calls for a HS-code-wise disclosure of the goods exported, the RoDTEP credit claimed, and a substantiation of the taxes, duties and levies actually borne on the export consignment but not refunded or remitted under any other scheme. A delayed filing attracts a composition fee of Rs. 10,000 (with a further Rs. 5,000 for each additional 30-day delay), and continued non-compliance may result in suspension of further RoDTEP claims and recovery, with interest, of credit already availed.
No RCMC required for post export remission schemes like duty drawback, RoDTEP, RoSCTL Schemes such as Duty Drawback, Rebate of State and Central Taxes and Levies (RoSCTL), and Remission of Duties and Taxes on Export Products (RoDTEP) fall under the category of remission-based schemes. These schemes are aimed at remitting duties or taxes on exported goods. For these remission-based schemes, the requirement of an RCMC (Registration-Cum-Membership Certificate) does not apply. Exporters can claim benefits under these schemes without obtaining an RCMC - DGFT trade notice No. 19/2024-25 dated 4-10-2024. The relevant extracts of the trade notice is provided below:
It has come to the notice of DGFT that there is some confusion regarding the mandatory requirement of an RCMC for schemes such as RoSCTL and RoDTEP. In this context, the following clarification is provided:
• Requirement of RCMC: As per Para 2.57 of FTP 2023, an RCMC is mandatory for exporters applying for an Authorisation to import/export under the FTP (except items listed as ‘Restricted’ items in ITC (HS)) or applying for any other benefit or concession under FTP. These above noted measures are distinguished from post-export remission-based schemes.
• Post-export Remission-Based Schemes: Schemes such as Duty Drawback, Rebate of State and Central Taxes and Levies (RoSCTL), and Remission of Duties and Taxes on Export Products (RoDTEP) fall under the category of remission-based schemes. These schemes are aimed at remitting duties or taxes on exported goods.
• No RCMC Required: For the aforementioned remission-based schemes, the requirement of an RCMC does not apply. Exporters can claim benefits under these schemes without obtaining an RCMC.
1.3 Developments in the RoDTEP Scheme since its Implementation
Although the RoDTEP scheme is comparatively young, it has seen a steady stream of policy and procedural developments since its operationalisation on 1 January 2021. The principal developments are recorded below in chronological order, so that a reader of this Commentary can trace the contour of the scheme as it stands on the date of going to press.
1.3.1 Birth of the scheme — 2020 to 2021
RoDTEP was conceived as a successor to MEIS following the WTO Panel’s adverse ruling in October 2019. The scheme was approved in principle by the Union Cabinet in March 2020. Section 51B was inserted in the Customs Act by the Finance Act, 2020, with effect from 27 March 2020, to provide the statutory home for the duty credit. The scheme was made operational for shipping bills filed on or after 1 January 2021. Until the scheme guidelines were notified, the eligibility was being recorded in the system on a provisional basis, and the formal sanction was deferred.
1.3.2 Notification of the scheme guidelines — 17 August 2021
DGFT Notification No. 19/2015-2020 dated 17 August 2021 inserted paragraphs 4.54 to 4.59 in the Foreign Trade Policy 2015-20 and notified, as Appendix 4R to the Handbook of Procedures, the rates of rebate and value caps for more than 8,000 tariff lines spanning eight HS Chapters and most categories of merchandise exports. The notification has been the principal scheme guideline to date and continues, in updated form, to govern the scheme.
1.3.3 Notification of the customs procedure — 23 September 2021
On the operative side, CBIC has issued two notifications on 23 September 2021:
• Notification No. 75/2021-Cus (N.T.) — issued under section 51B read with section 157 of the Customs Act, 1962, notifying the Electronic Duty Credit Ledger Regulations, 2021. The Regulations prescribe the manner of creation, maintenance, transfer and utilisation of the electronic duty credit ledger.
• Notification No. 76/2021-Cus (N.T.) — issued under section 51B (1), prescribing the conditions and restrictions subject to which duty credit shall issue under RoDTEP, and tabulating, at Table-1, the categories of exporters and exports that are ineligible for the credit.
Both notifications were supplemented by CBIC Circular No. 23/2021-Cus dated 30 September 2021, which laid out, in summary form, the procedural cadence for the scheme.
1.3.4 Coverage extended to specified Chemicals, Pharmaceuticals and Steel — December 2022
Originally, certain export-intensive sectors including chemicals (HS 28-29, 38-39), pharmaceuticals (HS 30) and articles of iron and steel (HS 72-73) had been excluded on account of budgetary considerations. Following representations from industry, DGFT extended the scheme to these sectors with effect from 15 December 2022. This was a significant extension and brought a large volume of high-value exports within the rebate.
1.3.5 Inclusion of AA, EOU and SEZ — 8 March 2024
DGFT Notification No. 70/2023 dated 8 March 2024 made a substantial structural amendment to the FTP. The serial numbers (viii), (x), (xi) and (xii) of paragraph 4.55 of the FTP which had hitherto excluded EHTP/BTP, AA, EOU and SEZ-manufactured products from RoDTEP were deleted with effect from 11 March 2024. A new paragraph 4.59A was inserted to provide that, for these categories, a separate Appendix 4RE would set out the eligible export items and their rates and value caps.
The scheme’s extension to AA holders (other than those discharging export obligation in respect of deemed exports), EOU units and FTWZ/SEZ units was a long-standing demand of the export community and brought to fruition the original intent of paragraph 4.55B of the FTP, which had specifically reserved the question of inclusion of these categories for a future decision based on the recommendations of the RoDTEP Committee.
1.3.6 “166” additional tariff lines for AA/EOU exports — 11 March 2024
DGFT Notification No. 74/2023 dated 11 March 2024 notified, in pursuance of Notification 70/2023, that the RoDTEP support for the 166 specific tariff lines listed in the Annexure (covering, inter alia, gold, silver, platinum and palladium and certain metals classified under Chapters 71, 75, 76, 78 and 79) shall be available for exports made by AA holders (other than for deemed exports) and EOU units with effect from 1 April 2024. Implementation in respect of SEZ units was deferred to such date as the IT integration of SEZ units with ICEGATE was operationalised, which has progressively occurred during 2024-25.
1.3.7 Periodic continuation of the scheme
RoDTEP, like its predecessors, is operated within an annual budgetary framework. The Central Government has, on a periodic basis, extended the validity of the scheme. The most recent extensions are:
Notification Date Period extended Remarks
DGFT Notification No. 70/2023
DGFT Notification No. 74/2023
DGFT Notification No. 74/2025-26
1.3.8
8.03.2024 FY 2023-24 onwards (for AA/EOU/SEZ)
11.03.2024 w.e.f. 1.04.2024
31.03.2026
1.04.2026 to 30.09.2026
Inclusion of AA/EOU/SEZ; insertion of paragraph 4.59A; introduction of Appendix 4RE.
Operationalisation of the 166 tariff lines for AA/EOU under Appendix 4RE.
Continuation of the scheme for a further period of six months at the rates and value caps as in force on 31 March 2026.
Alignment of the schedule with the Customs Tariff — May 2026
Whenever the First Schedule to the Customs Tariff Act, 1975 is amended typically, in pursuance of the Finance Act of the year the Appendix 4R/4RE schedule under RoDTEP must be aligned with the new tariff structure. The most recent such alignment was effected by DGFT Notification No. 15/2026-27 dated 30 April 2026, which gave effect, with effect from 1 May 2026, to the consequential amendments. The alignment involved:
• Addition of 142 tariff lines, at the 8-digit level, in Appendix 4R and Appendix 4RE;
• Deletion of 50 tariff lines that no longer feature in the First Schedule consequent to the amendments;
• Change in description of 02 tariff lines.
Alongside, certain inadvertent description-related anomalies were corrected for instance, the description of HS Code 73181500, which originally read “Screw for use in manufacture of cellular mobile phone”, was retroactively corrected to “Other screws and bolts, whether or not with their nuts or washers”, with effect from 15 December 2022, by DGFT Notification No. 06/2026-27 dated 9 April 2026.
1.3.9 Operational notifications and circulars — At a glance
Instrument
Notification No. 19/20152020 17.08.2021 DGFT
Notification No. 75/2021Cus (N.T.)
23.09.2021
Inserts paragraphs 4.54 to 4.59 in FTP; notifies Appendix 4R.
CBIC Notifies Electronic Duty Credit Ledger Regulations, 2021.
Notification No. 76/2021Cus (N.T.) 23.09.2021 CBIC Manner of issue and use of duty credit under RoDTEP.
Circular No. 23/2021-Cus 30.09.2021 CBIC Implementation guidance on RoDTEP.
Notification No. 70/2023 08.03.2024 DGFT
Notification No. 74/2023 11.03.2024 DGFT
Notification No. 74/2025-26 31.03.2026 DGFT
Notification No. 06/2026-27 9.04.2026 DGFT
Inclusion of AA/EOU/SEZ in scope; new paragraph 4.59A; Appendix 4RE.
166 tariff lines for AA/EOU exports w.e.f. 1.04.2024.
Continuation of RoDTEP from 1.04.2026 to 30.09.2026.
Correction in description against HS Code 73181500 in Appendix 4R/4RE w.e.f. 15.12.2022.
Notification No. 15/2026-27 30.04.2026 DGFT Alignment of RoDTEP schedule with the First Schedule to the Customs Tariff Act, 1975 w.e.f. 1.05.2026.
1.4 Issuing Authorities and Purpose of Notifications
RoDTEP is a multi-agency scheme. The issuance of notifications under the scheme is, accordingly, distributed among several Central authorities, each acting within the four corners of the statute that confers the power. A clear understanding of who issues which notification and for what purpose is essential for an exporter or a practitioner navigating the scheme.
1.4.1
Directorate General of Foreign Trade (DGFT)
DGFT is the line agency under the Department of Commerce, Ministry of Commerce and Industry. It exercises power under Section 5 of the FTDR Act, 1992, read with paragraph 1.02 of the FTP. In relation to RoDTEP, DGFT issues notifications for the following purposes:
• Notifying and amending the scheme guidelines (paragraphs 4.54 to 4.59 of the FTP);
• Notifying Appendix 4R (rates of rebate and value caps for the regular RoDTEP) and Appendix 4RE (rates for AA/EOU/SEZ exports);
• Including or excluding sectors, tariff lines and categories of exporters from the scope of the scheme;
• Aligning the schedule with amendments to the First Schedule to the Customs Tariff Act, 1975 — typically following the annual Finance Act;
• Continuation of the scheme beyond the validity period prescribed by the immediately preceding notification;
• Correction of inadvertent errors in description, classification or rate.
1.4.2 Central Board of Indirect Taxes and Customs (CBIC)
CBIC, under the Department of Revenue, Ministry of Finance, is the operative authority. It exercises power under Section 51B of the Customs Act, 1962. In relation to RoDTEP, CBIC issues notifications under the Customs Act for the following purposes:
• Notifying the Electronic Duty Credit Ledger Regulations, 2021 — under section 51B read with section 157 of the Customs Act;
• Prescribing the conditions and restrictions subject to which duty credit may be issued (Notification No. 76/2021-Cus (N.T.));
• Notifying the categories of exporters and exports ineligible for the duty credit (Table-1 of Notification No. 76/2021-Cus (N.T.));
• Specifying the manner of cancellation of duty credit, recovery of credit allowed in excess, and recovery on non-realisation of sale proceeds;
• Issuing executive instructions, circulars and standing orders for the smooth implementation of the scheme by field formations.
1.4.3 Department of Revenue/Drawback Division
The Department of Revenue houses the RoDTEP Committee, which is the body that recommends the rates of rebate and any revisions thereto. The Committee is constituted in the Drawback Division of the Department of Revenue and includes representation from DoC/DGFT, the line ministries and external experts. While the Committee itself does not issue notifications, its recommendations form the basis on which DGFT amends Appendix 4R/4RE. The Department of Revenue also handles, with the Department of Commerce, the budgetary outlay for the scheme.
1.4.4 Ministry of Finance — Department of Expenditure
The overall budgetary outlay for the RoDTEP Scheme for each financial year is finalised by the Ministry of Finance in consultation with the Department of Commerce. The annual outlay is the principal constraint on the rate-setting exercise. The rates and the calibration of the scheme are designed to keep the projected disbursal within the approved Budget.
1.4.5 Inter-Ministerial Committee for residual issues
Paragraph 4.58 of the FTP contemplates an Inter-Ministerial Committee chaired by an officer in the rank of Additional Secretary in the Department of Commerce to consider residual issues that may arise in the implementation of the scheme. Although not a notification-issuing authority in the strict sense, the Committee’s recommendations frequently translate into circulars and instructions issued by CBIC or DGFT.
1.4.6 Reserve Bank of India
The RBI is not an authority under the scheme as such, but its role is critical because the duty credit is contingent upon realisation of sale proceeds within the period prescribed under FEMA. The RBI may, in appropriate cases, extend the period for realisation, which directly affects the recovery framework under the scheme.
Overriding Nature of Foreign Trade Policy (FTP)
Jurisprudence has largely established that where an export incentive originates from FTP guidelines, the FTP’s provisions often override restrictive Customs interpretations, preventing departments from taking contradictory stands to deny rightful claims.
The Delhi High Court (‘HC’), in the case of Greatship India Ltd. v. Union of India 2016 (338) E.L.T. 545 (Del.), was dealing with the prohibition on import of goods imposed by Customs Authorities where customs duty was paid using Served From India Scheme (‘SFIS’). However, the FTP did not provide so in the entire framework of SFIS or the policy. The Court, while holding the customs notification illegal, held that DGFT is the final authority for interpreting the FTP and not Customs. The Court further observed that FTP and notification under the Customs Act 1962 should form part of one harmonious statutory scheme and not contradict with each other.
In the case of Ericsson India Global Services (P) Ltd. v. Union of India, [2021] 127 taxmann.com 101, the Delhi HC observed that the instructions issued by the Customs for the exclusions of SEIS to be violative of FTP and held that it was against the intention of FTP.
Even in the case of Reliance Industries Ltd. v. CC [2013] 293 ELT 679, (CESTAT-Mum.) upheld that provisions of FTP shall override the customs notification in the context of export promotion benefit.
In the context of conflict between FTP and Customs Notification, the Supreme Court, High Courts and Tribunal have held that FTP would override the Customs Notification, where an export benefit originated from FTP is concerned. However, when it comes to exemptions from customs duties, the customs notification would prevail over FTP.
1.5 Clause-by-Clause Notes on the Operative Notifications
This section provides a paragraph-by-paragraph commentary on the principal notifications that govern RoDTEP. Each notification is taken up in chronological order, beginning with the foundational scheme guideline notification of 17 August 2021 and ending with the most recent alignment notification of 30 April 2026.
