The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme works alongside Goods and Services Tax (GST) by refunding embedded taxes and levies that are not recoverable under GST. GST ensures that exports are treated as zero-rated supplies. Together, these mechanisms aim to ensure that exported goods from India carry no domestic tax burden, thereby improving global competitiveness and protecting exporter margins.
For Indian exporters, understanding how RoDTEP and GST interact is important. Misalignment between the two can lead to missed refunds or audit risks. This article explains how both systems operate together within India’s regulatory framework.
What is the RoDTEP scheme, and why was it introduced?
RoDTEP was introduced on 1st January, 2021 under the Foreign Trade Policy, replacing the Merchandise Exports from India Scheme (MEIS), which was found non-compliant with World Trade Organization (WTO) norms. It was designed to refund embedded central, state and local taxes that are not otherwise refunded through any existing mechanism, including GST. Unlike incentive-based schemes, RoDTEP is structured as a remission mechanism. It neutralises actual tax incidence on exports rather than offering subsidies.
Refund rates are notified per 8-digit Harmonised System (HS) code and continue to be product-specific. Following the latest rationalisation, both the rates and value caps have been reduced to 50% of their earlier levels. The revised rates remain modest, now often well below 1% of the Free on Board (FOB) value, with product-specific value caps still applicable in many cases. Rates vary significantly across tariff lines and are notified periodically, rather than following a uniform percentage range.
The benefit is issued in the form of transferable electronic duty credit scrips (e-scrips) through the Indian Customs Electronic Gateway (ICEGATE) system.
How does GST treat exports in India?
Under the GST law, exports are classified as zero-rated supplies. This means that GST is not meant to be a cost on exports, and exporters are entitled to claim refunds of Input Tax Credit (ITC). Output tax on exports can either be paid and later refunded or not paid at all.
Exporters have two routes under GST:
- Export under Letter of Undertaking (LUT): Goods are exported without payment of Integrated Goods and Services Tax (IGST), and the exporter claims a refund of accumulated ITC.
- Export with IGST payment: The exporter pays IGST at the time of export and later claims a refund of the IGST paid.
Both routes ensure GST neutrality. However, GST refunds only cover creditable taxes under the GST framework. This is where RoDTEP becomes essential.
Which taxes does RoDTEP cover that GST does not?
GST allows credit of eligible input taxes. However, several embedded costs remain outside the GST credit mechanism. RoDTEP addresses these gaps through sector-level remission rates notified per HS code.
Examples of such non-creditable taxes and levies that RoDTEP accounts for include:
- Electricity duty paid on manufacturing operations
- Mandi tax on agricultural procurement
- Stamp duty on export documentation
- VAT on fuel used in transportation and production
- Municipal and local body levies
An important clarification: blocked ITC under Section 17(5) of the CGST Act is not refunded under RoDTEP. RoDTEP compensates only for embedded duties and levies that are outside the GST credit chain, and not for disallowed GST credits. This is a common misconception that can lead to incorrect claims.
While GST ensures refund of input taxes charged within its structure, RoDTEP neutralises remaining embedded costs that cannot otherwise be claimed.
How do RoDTEP and GST operate together in practice?
In practical terms, an exporter must treat GST and RoDTEP as parallel compliance tracks.
Under GST:
- The exporter files GSTR-1 and GSTR-3B.
- Refund of ITC or IGST is processed through the GST portal.
- Export documentation must match shipping bill data.
Under RoDTEP:
- The exporter must declare the intent to claim RoDTEP in the shipping bill.
- The claim is processed through ICEGATE.
- A scroll is generated indicating the eligible remission amount once the shipping bill is processed and the Export General Manifest (EGM) filing is complete.
- The benefit is credited as an e-scrip in the exporter’s ledger.
RoDTEP is calculated on the FOB value and not on the tax paid. It is not linked to the GST refund amount.
Exporters must reconcile shipping bill data, EGM, GST returns and Bank Realisation Certificate (BRC) data to ensure consistency across systems. While realisation of export proceeds supports overall FEMA and GST reconciliation, the RoDTEP benefit itself is not directly contingent on the amount of GST refund claimed.
Who is eligible to claim RoDTEP benefits?
All goods exporters with a valid Importer Exporter Code (IEC) and GST registration are eligible, subject to the notified product coverage.
Eligible categories include manufacturer exporters, merchant exporters, micro, small and medium enterprises (MSMEs), Advance Authorisation (AA) holders and Export Oriented Units (EOUs).
Units in Special Economic Zones (SEZs) are also eligible as per the latest notifications reinstating eligibility from 1st June 2025 for FY 2025–26.
Important note for Advance Authorisation holders: RoDTEP benefits have been restored for exports made under Advance Authorisation, SEZs, and EOUs effective June 1, 2025, and the scheme has been extended until March 31, 2026. AA holders may now claim RoDTEP on eligible exports, subject to DGFT’s notified conditions and compliance with the Customs Tariff Act. Exporters should carefully identify and segregate eligible portions of their shipments before filing claims to ensure accuracy and avoid disallowances.
Service exports are not covered under RoDTEP. Goods that are prohibited or restricted for export, or those lacking electronic documentation through ICEGATE, are also not eligible.
What is the compliance process for claiming RoDTEP?
To claim RoDTEP correctly, exporters must follow these steps:
- Exporters must declare their intent to claim RoDTEP at the time of filing the shipping bill. If this declaration is missing, the benefit cannot be claimed later.
- Export details must be transmitted electronically through ICEGATE. Once the Export General Manifest (EGM) is filed and validated, the shipping bill is processed, and the system generates a RoDTEP scroll reflecting the remission amount.
- The remission amount is credited as an e-scrip in the exporter’s electronic ledger. These e-scrips can be used to pay Basic Customs Duty. They can also be transferred to another importer. Scrips carry a notified validity period, and expired scrips cannot be redeemed. Exporters must track expiry dates carefully.
Exporters should stay updated with DGFT notifications. The latest update (Notification No. 60/2025-26 dated 23 February 2026) capped RoDTEP rates and value limits at 50% of the existing levels across all HS lines in Appendix 4R and 4RE.
What common mistakes reduce exporter refunds?
Exporters often lose legitimate benefits due to avoidable errors.
Some common issues include:
- Not selecting the RoDTEP option in the shipping bill
- Misclassifying HS codes and attracting the wrong rate
- Mismatching GST export data with shipping bill details
- Not tracking e-scrip validity dates
- Failing to maintain adequate documentation for audit queries
Strong internal controls and periodic reconciliation between GST returns, ICEGATE data and financial records reduce these risks.
Conclusion
The RoDTEP scheme and GST are not overlapping incentives. They serve complementary purposes. GST ensures that input taxes within the GST framework do not burden exports. RoDTEP neutralises embedded levies and duties that remain outside the GST credit system.
For Indian exporters, especially MSMEs operating on tight margins, understanding this distinction is crucial. Proper coordination between GST filings, shipping documentation and RoDTEP declarations ensures that no eligible remission is lost. When handled correctly, RoDTEP and GST together ensure that Indian exports remain tax-neutral and globally competitive.
Managing two compliance tracks simultaneously requires accurate records, timely reconciliation and up-to-date rate mapping. TallyPrime helps exporters stay on top of both, so no eligible refund is missed.
