RODTEP Scheme on Export – Boosting India’s Export Competitiveness
Table of Contents
Overview of the RODTEP Scheme
The Remission of Duties and Taxes on Exported Products (RODTEP) scheme is a vital export incentive launched by the Government of India on January 1, 2021, as part of the Foreign Trade Policy (FTP). It was introduced to replace the earlier Merchandise Exports from India Scheme (MEIS) to comply with the World Trade Organization (WTO) regulations by providing refunds on embedded taxes and duties not exempted or refunded under any other mechanism.
The RODTEP scheme refunds the taxes and levies such as Value Added Tax (VAT), Central Sales Tax (CST), state taxes and other charges incurred on exported goods, which were earlier unrecoverable, thus leveling the playing field for Indian exporters in international markets.
The scheme is governed under India’s Foreign Trade Policy (2023-28) and Handbook of Procedures by the Directorate General of Foreign Trade (DGFT), which define the product eligibility, rates, and procedural guidelines for effective implementation.
RODTEP bolsters India’s export economy by enhancing the price competitiveness of products, especially those with significant tax burdens domestically, furthering India’s “Make in India” and export promotion ambitions.
Who Needs the RODTEP Scheme?
- Exporters of goods from India who face indirect taxes not refunded by other schemes.
- Small, medium, and large businesses across key sectors such as textiles, leather, pharmaceuticals, chemicals, engineering, and agriculture.
- Exporters not benefiting fully under the earlier MEIS scheme or other incentive programs.
- Entities aiming to maximize export proceeds by reclaiming embedded tax costs.
- Manufacturing units, Merchant Exporters, Export Oriented Units (EOU), and Special Economic Zone (SEZ) units supplying eligible products.
- Exporters compliant with GST but requiring additional tax remission to compete effectively.
- Businesses exporting manufactured goods with embedded state and central indirect taxes.
RODTEP complements the IGST refund and duty drawback schemes, catering broadly to exporters seeking full tax cost recovery
Key Benefits of the RODTEP Scheme
- Enhanced Export Competitiveness: Refunds embedded taxes and levies not exempted or otherwise refunded, enabling competitive pricing in global markets.
- Increased Cash Flow: Credit scrips issued under the scheme can be utilized for payment of customs duties, GST, and income tax, improving financial flexibility.
- Compliance with WTO Norms: Replaces MEIS with a WTO-compatible mechanism avoiding trade disputes.
- Inclusivity: Covers a wide range of products and sectors, including MSMEs and niche exporters.
- Digitally Enabled: Instant credit of incentives via electronic scrips integrated with Customs and GST systems.
- Supports Strategic Sectors: Provides higher rates for select sectors to promote Make in India initiatives.
- Encourages Domestic Manufacturing: By fully refunding embedded taxes, it promotes use of domestic inputs and value addition.
- Transparency and Ease of Access: Clearly defined rates and online claim process reduce uncertainties.
These benefits ensure Indian exporters remain competitive and financially supported in a dynamic global trade environment.
Procedure to Claim RODTEP Benefits
Step 1: Export Documentation
- Apply for Exporter’s Registration Number (optional but recommended).
- Ensure valid Import Export Code (IEC) and GST registration.
Step 2: File Shipping Bill
- Declare exports under appropriate FTP provisions and mention RODTEP eligibility.
Step 3: Claim Creation
- Exporters receive notification of entitlement and applicable RODTEP rates from DGFT.
- Credit scrips equivalent to the rebate value are generated in the exporter’s NIEPMS (National Informatics Centre’s Online Portal).
Step 4: Utilize Scrips
- Scrips can be used for payment of customs duties, excise duties, service tax, income tax, and GST.
- They are transferable and can be sold to other importers or manufacturers.
Step 5: Maintain Records
- Exporters must maintain compliance and database records as proof for audits.
Step 6: Claim Monitoring
- Exporters can monitor claim status real-time through the DGFT portal.
Documents Required for RODTEP Refund
Valid Import Export Code (IEC).
Shipping Bills and Bills of Export.
GST returns (GSTR-1 and GSTR-3B).
LUT or Bond copy if exporting without payment of IGST.
Bank realization certificates (BRC/FIRC) for export proceeds.
Relevant commercial invoices and packing lists.
Export declaration specifying RODTEP claim on shipping bills.
DGFT approval or notification specific to RODTEP rates and eligibility.
Update and Compliance for RODTEP Claims
- Stay updated on product-wise RODTEP rates as published in FTP appendices.
- Renew LUT annually and maintain valid export registrations.
- File GST returns timely and keep export-related records for audit.
- Respond to DGFT or Customs queries or grievances promptly.
- Maintain reconciliation between export data and RODTEP credit scrip usage.
- Avoid misuse of credits to prevent penalties or cancellation.
- Monitor DGFT notifications and policy updates for changes affecting RODTEP claims.
Why Choose Us for RODTEP Assistance?
- Expertise in Export Refund Schemes: We specialize in RODTEP claim preparation and strategy.
- End-to-End Support: From documentation to filing to credit scrip management.
- Accurate Claim Filing: Prevent common errors leading to delays or rejection.
- Timely Updates: Stay informed on policy changes impacting refund rates and procedures.
- Maximized Benefits: We help optimize claims based on product classification and export data.
- Dedicated Client Support: Personalized guidance suited to MSMEs and large exporters.
- Proven Track Record: Help exporters across industries secure refunds efficiently.
Frequently Asked Questions (FAQs)
What is the RODTEP scheme?
RODTEP refunds embedded taxes and duties on exported products not exempted under other schemes.
Who is eligible for RODTEP benefits?
Exporters of eligible products following FTP guidelines with valid IEC and GST registrations.
How do I claim RODTEP?
File export shipping bills correctly and claim rebate via DGFT’s online portal as per procedural rules.
What documents are needed?
IEC, shipping bills, GST returns, LUT/bond, export invoices, bank realization certificates, etc.
How can RODTEP credits be used?
Credits can be used to pay customs duties, GST, income tax, and can be transferred or traded.
What is the validity of RODTEP credit scrips?
Valid for a specified period as notified in FTP; typically 3 years from date of issuance.
Is RODTEP compliant with WTO?
Yes, it is designed to be WTO-compliant, replacing MEIS which was discontinued due to incompatibility.