RoDTEP scheme explained

What is the RoDTEP Scheme?

The RoDTEP scheme, operational since January 1, 2021, is a World Trade Organization (WTO)-compliant initiative designed to remit (refund) all hidden Central, State, and Local duties, taxes, and levies that are incurred during the manufacture and distribution of exported products, but are not otherwise refunded under any other scheme.

The core principle behind RoDTEP is to ensure that goods are exported, but taxes are not.

RoDTEP Replaces MEIS: A WTO-Compliant Shift

RoDTEP was introduced to replace the existing Merchandise Exports from India Scheme (MEIS). The need for this replacement arose because the MEIS scheme was deemed non-compliant with the WTO’s rules on export subsidies. RoDTEP, on the other hand, is a duty-remission scheme, aligning India’s export incentives with global trade norms, thus ensuring long-term policy certainty for exporters.

What Hidden Taxes and Duties Does RoDTEP Refund?

Unlike previous schemes which largely focused on GST and Customs duties (which are already refunded through other mechanisms like GST refunds or Duty Drawback), RoDTEP targets the “embedded” or “un-rebated” costs.

Key embedded taxes and duties that RoDTEP helps neutralize include:

• VAT and Central Excise Duty on fuel (e.g., Petrol, Diesel) used for transportation of export goods or in captive power generation.

• Electricity Duty on the power used in manufacturing.

• Mandi Tax or Agricultural Produce Market Committee (APMC) taxes.

• Stamp Duty on export documents.

• Embedded CGST/SGST/IGST on inputs like those for transportation or services like ‘rent-a-cab’ that are non-creditable.

By refunding these costs, RoDTEP significantly reduces the total cost of production, allowing Indian exporters to offer more competitive pricing in the international market.

Who is Eligible for RoDTEP Benefits?

The scheme offers broad coverage to encourage exports from all segments.

Category	Eligibility
Exporter Type	All exporters are eligible, including Manufacturer Exporters and Merchant Exporters (traders).
Minimum Turnover	No minimum turnover criteria is specified. The scheme aims to support Micro, Small, and Medium Enterprises (MSMEs).
Product Origin	The exported goods must have their Country of Origin as India.
Sectors Covered	Covers almost all export sectors, including traditional labor-intensive sectors like Textiles, Engineering Goods, Leather, Pharmaceuticals, and Agriculture.

Key Exclusions (Who is NOT Eligible)

To avoid double benefits, certain categories are generally excluded from the scheme:

• Exports from Special Economic Zones (SEZs) and Export-Oriented Units (EOUs) (though this rule is subject to recent notifications and changes).

• Exporters availing benefits under other duty exemption/remission schemes like Advance Authorization (AA) or Duty-Free Import Authorization (DFIA) for the same export.

• Deemed exports (supplies made within India).

• Goods subject to minimum export price or export duty.

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How RoDTEP Works: The e-Scrip Mechanism

The refund under the RoDTEP scheme is provided in the form of a transferable Electronic Duty Credit Scrip (e-scrip), which is maintained in an electronic ledger by the Central Board of Indirect Taxes and Customs (CBIC).

1. Declaration: The exporter must declare their intent to claim RoDTEP (‘RoDTEPY’) in the Shipping Bill filed with Customs.

2. Processing: After the Export General Manifest (EGM) is filed and the goods are shipped, the Customs system (ICEGATE) processes the claim based on the product’s HSN code and the defined RoDTEP rate.

3. Credit: The eligible refund amount is credited to the exporter’s ledger account on the ICEGATE portal as an e-scrip.

4. Usage: The e-scrip can be used to pay Basic Customs Duty on imported goods, or it can be electronically transferred and sold to any other importer with a valid Import Export Code (IEC).

Boosting Global Competitiveness

RoDTEP is a significant leap forward in India’s export promotion strategy. By systematically addressing all embedded tax costs, the scheme:

1. Lowers Export Costs: Directly reduces the production cost, giving Indian products a competitive price edge globally.

2. Ensures WTO Compliance: Provides a stable, legally sound incentive system that is not susceptible to trade disputes.

3. Promotes Transparency: The fully automated, digital system (ICEGATE portal) simplifies the claim process and enhances transparency.

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Globax Solutions: Your Partner in Claiming RoDTEP

Navigating the HSN-code specific rates (which typically range from 0.3% to 4.3% of the FOB value) and the detailed documentation requirements for RoDTEP can be complex. At Globax Solutions, we specialize in simplifying this process for you.

Our services ensure:

• Accurate Rate Determination: Identifying the correct RoDTEP rate for your specific product (8-digit HSN code).

• Seamless Documentation: Guiding your team through the mandatory declarations and post-export filing.

• Timely Scrip Generation: Ensuring fast and efficient processing of your e-scrips for maximum cash flow optimization.