DGFT: RoDTEP extended to 31 December 2026, rates unchanged

The Directorate General of Foreign Trade (DGFT) has extended the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme until 31 December 2026, while keeping its existing rates and value caps unchanged. Notification No. 41/2026-27, dated 30 September 2026, covers eligible exports by Domestic Tariff Area units, Advance Authorisation holders, Special Economic Zone units and Export Oriented Units.

The notification preserves the rates and caps applicable on 30 September 2026 under Appendix 4R and Appendix 4RE, the schedules specifying export-remission benefits. DGFT said the scheme’s other terms and conditions also remain unchanged. The decision therefore extends the period of support without announcing a higher rebate or a revised set of conditions.

Four exporter categories covered

DGFT’s notification expressly includes Domestic Tariff Area (DTA) units, Advance Authorisation (AA) holders, Special Economic Zone (SEZ) units and Export Oriented Units (EOUs). Its operative effect is to continue RoDTEP for eligible exports from these categories up to the December deadline.

The qualification matters: the notification refers to eligible exports, rather than granting a uniform benefit to every shipment made by an exporter in one of these categories. It retains the existing scheme conditions and the applicable rate schedules.

This coverage differs from the scheme’s original framework. The Department of Commerce’s 2021 guidelines initially listed exports under Advance Authorisation, exports by EOUs and exports from SEZ units among categories whose inclusion would be decided later. Those guidelines reserved the government’s power to modify the categories covered by the scheme.

The September 2026 notification explicitly includes these categories in the continuation. It does not, however, describe their inclusion as new or establish when each first became eligible.

Rates and per-unit ceilings stay in place

The extension changes the scheme’s end date, not the rate calculation specified in the applicable schedules. DGFT said both existing rates and value caps would continue unchanged during the extended period.

The Department of Commerce’s original guidelines explain the calculation framework. For eligible products, the rebate is generally a notified percentage of the Free on Board (FOB) export value, subject to a per-unit value cap wherever one is prescribed. For certain products, the government may instead notify a fixed rebate amount per unit.

The guidelines organise eligible products under eight-digit HS codes, the product-classification codes used in the schedules. A rate and a value cap perform different functions: the rate determines the percentage-based rebate, while a cap limits the amount available per unit of the exported product.

Accordingly, the September notification does not announce a single rebate percentage for all exporters. It carries forward the product-specific rates and ceilings in the two appendices. It also does not reproduce those schedules or announce a new list of product rates.

What RoDTEP is intended to reimburse

The Department of Commerce’s 2021 guidelines define RoDTEP’s purpose as refunding duties, taxes and levies that remain unreimbursed through other mechanisms. These can arise at the central, state or local level and be borne by the exported product.

The stated scope includes indirect taxes on goods and services used earlier in production, as well as specified indirect taxes associated with distribution of the exported product. The same guidelines prohibit a rebate for duties and taxes that have already been exempted, remitted or credited.

That restriction distinguishes the scheme’s purpose from a general payment for making an export. Its stated objective is to remit tax costs that remain embedded in eligible exported goods, without reimbursing the same tax twice.

RoDTEP is also distinct from duty drawback. In its “Duty Drawback” booklet, the Central Board of Indirect Taxes and Customs (CBIC) describes drawback as rebating Customs and Central Excise duties on imported and excisable materials used to produce export goods. RoDTEP’s guidelines, by contrast, address otherwise unreimbursed duties, taxes and levies across the stated levels of government.

Rebate takes the form of electronic duty credit

The Department of Commerce’s guidelines provide for RoDTEP benefits through transferable electronic duty credits, called e-scrips, maintained in an electronic ledger by CBIC. An e-scrip is a digital record of duty credit, rather than a direct cash refund into an exporter’s bank account.

Under that framework, the credits are usable for Basic Customs Duty, the customs charge specified in the First Schedule to the Customs Tariff Act, 1975. The guidelines assign notification of the scheme to the Department of Commerce and its administration to the Department of Revenue.

The original guidelines also place RoDTEP within an annual budget framework. They provide for the Ministry of Finance to finalise the overall outlay in consultation with the Department of Commerce and allow benefits to be calibrated to the approved budget. The September extension notification announces no fresh budget allocation.

Conditions extend beyond the shipment

The Department of Commerce’s guidelines make the rebate conditional on receipt of export sale proceeds within the period allowed under the Foreign Exchange Management Act, 1999, the law governing foreign-exchange transactions. They distinguish issuing the rebate from retaining entitlement to it: receipt of payment need not precede issuance, but failure to receive it within the permitted period can invalidate the rebate.

The same guidelines require exporters to retain records substantiating their claims. They provide for CBIC to use a risk-based monitoring and audit system to select cases for physical verification of those records. DGFT’s September notification extends the scheme without changing its other governing terms and conditions.