RoDTEP & Duty Drawback: Exporter's Complete Guide

RoDTEP (Remission of Duties and Taxes on Exported Products) is an Indian export-incentive scheme that reimburses embedded taxes — VAT on fuel, electricity duty, mandi tax — at product-specific rates ranging from approximately 0.3% to 4.3% of FOB value. Duty Drawback is the parallel customs scheme that refunds basic customs duty on imported inputs used in exports. Exporters claim both through ICEGATE shipping-bill filings, receiving transferable e-scrips for RoDTEP and a direct bank credit for drawback. This guide walks through the RoDTEP scheme, duty drawback, rates, eligibility, claim mechanics, and the exclusions every exporter must verify.

This post is part of our International Shipping from India: Complete Export Guide pillar for Indian exporters shipping internationally.

What is the RoDTEP scheme

RoDTEP launched on 1 January 2021 to replace MEIS (Merchandise Exports from India Scheme), which the WTO ruled was a prohibited export subsidy. Unlike MEIS, RoDTEP is WTO-compliant because it refunds taxes that are demonstrably embedded in exported products — not a generic flat-rate sweetener.

Administrative architecture:

• Department of Commerce notifies the scheme framework via the Foreign Trade Policy
• DGFT governs eligibility and operational rules
• CBIC issues product-wise rate notifications at the 8-digit HS code level
• ICEGATE is the technical filing platform — shipping-bill claim flag, scrip generation, transfer

RoDTEP covers nearly all exported products, except a notified excluded list that includes goods exported under certain other duty-remission schemes, SEZ unit exports, EOU exports, and a handful of sectors (pharmaceuticals partial, chemicals partial, steel periodically) that have moved in and out depending on the latest notification.

What RoDTEP actually refunds:

The scheme reimburses embedded indirect taxes that are not refundable under GST, duty drawback, or any other mechanism. These include:

• VAT on fuel (diesel for transport, generator fuel for power)
• Electricity duty levied by state governments
• Mandi tax on agricultural inputs
• Stamp duty on documents
• Embedded central taxes on certain transactions

For MSME exporters using international courier and freight, the RoDTEP benefit typically lands in the 0.5-2.5% of FOB band — material at scale, especially on price-sensitive markets like the US and EU. For first-time exporters, see our Beginner’s Guide to Import-Export for terminology and base concepts.

RoDTEP scheme benefits and duty drawback overview

Direct benefits of RoDTEP:

• Cash-equivalent transferable e-scrip credited to the exporter’s ledger on ICEGATE
• Usable against basic customs duty on future imports
• Transferable to another IEC holder (which means it has secondary-market liquidity)
• Improves price competitiveness on price-sensitive markets — US, EU, UK buyers compare landed cost at the cent level

Duty Drawback: the parallel scheme

Duty Drawback operates under Section 75 of the Customs Act, 1962. It refunds the basic customs duty (BCD) paid on imported inputs that are consumed in the manufacture of exported goods. Two variants:

• All Industry Rate (AIR): default rate published in the Drawback Schedule for each HS code, applied automatically when the shipping bill carries the drawback declaration.
• Brand Rate: customised, exporter-specific rate granted when AIR is insufficient or unavailable for the product. Applied for under Rule 7 by filing Form ANF-7 with the jurisdictional Customs Commissionerate.

Can both be claimed? Generally yes — they refund different things (RoDTEP for embedded indirect taxes; drawback for BCD on imported inputs). But certain combinations are restricted: RoDTEP is not available on goods exported under Advance Authorisation, EOU, or SEZ schemes, and certain higher AIR drawback rates may exclude parallel RoDTEP. Verify against the latest CBIC notification before assuming both stack.

RoDTEP rates: how to look them up

Rates are notified product-wise at the 8-digit HS code level by CBIC. The notification format is a tabular schedule with columns for HS code, description, RoDTEP rate (as a percentage of FOB value), and per-unit cap (in Rs per unit of measure).

Where to look:

• CBIC notifications published on cbic.gov.in
• The rates table on icegate.gov.in
• The DGFT portal for FTP-related references

Worked example: HS code 6304 (textile furnishings, hand-loomed — bedcovers, table runners, hand-woven rugs). The rate for this HS code is published in the latest CBIC notification — refer to the current schedule before quoting the benefit to a buyer or building it into pricing. Per-unit caps apply for many HS codes, so the headline percentage rate may be capped at a fixed Rs-per-kg or Rs-per-piece amount.

Practical tip: before any large order, your customs broker should confirm three things — the current 8-digit RoDTEP rate, the per-unit cap (if any), and whether the buyer’s destination country has tariff implications that change your FOB. See How to Choose a Customs Broker for selection criteria.

Eligibility and excluded sectors

Who is eligible:

• Any IEC-registered exporter
• Shipping a product NOT in the excluded list
• Filing under the standard shipping-bill regime (not courier-mode for commercial exports above the courier-mode threshold)

Excluded categories (verify against latest notification):

• Goods manufactured or exported under Advance Authorisation
• Goods exported by EOUs (Export Oriented Units)
• Goods exported by SEZ units
• Goods that receive duty drawback at a higher All Industry Rate where overlap is restricted
• Restricted or prohibited products under the Foreign Trade Policy
• Specific sectors notified as ineligible at the time of export (steel and pharmaceuticals partial coverage have shifted historically)

The shipping-bill flag: when filing the shipping bill on ICEGATE, the exporter declares “RoDTEP claim: yes/no” via a specific marker. Choosing “no” — or omitting the marker for an eligible product — irretrievably forfeits the benefit for that shipment. There is no post-LEO retroactive claim mechanism. This is the single most common error in the field.

How to claim RoDTEP step-by-step

The RoDTEP claim is built into the standard ICEGATE shipping-bill workflow. The 6-step process:

1. Register or log in on ICEGATE with IEC-linked credentials. First-time registration requires PAN, IEC, and a digital signature certificate (DSC).
2. File the shipping bill with the RoDTEP claim declaration in the EDI shipping-bill XML. The system requires an explicit yes/no marker — set “yes” for eligible exports.
3. Customs processes the shipping bill. Goods are examined as per the risk-management profile, and the “Let Export Order” (LEO) is granted post-examination.
4. Scroll lists are generated daily by Customs. The system computes RoDTEP entitlement at the notified rate (or per-unit cap, whichever is lower) for each LEO-cleared shipping bill.
5. Credits appear in the exporter’s RoDTEP ledger on ICEGATE. Visible under the RoDTEP scroll section, usable as a transferable e-scrip.
6. Generate the scrip within the validity window — refer to the latest notification for the current window. The scrip can be used to pay BCD on imports or transferred via the ICEGATE scrip-transfer module to another IEC holder (effectively monetising the benefit).

Validity note: e-scrips have a finite validity from generation date. Failing to generate or transfer within the window means the entitlement lapses. Set a monthly calendar reminder, especially in the closing month of each financial quarter.

For the full document set required before filing, see our Export Documentation Simplified Guide.

Duty drawback step-by-step

All Industry Rate (AIR) process:

1. Verify your HS code has an AIR entry in the current Drawback Schedule
2. Declare the drawback claim flag on the shipping bill at filing
3. Customs grants LEO; drawback is computed at the AIR rate
4. Amount credits to the IEC-linked bank account post-LEO

Brand Rate process:

1. Compile imported-input data — bill of entry, paid BCD, quantity consumed per unit exported
2. File Form ANF-7 with the jurisdictional Customs Commissionerate (drawback section)
3. Submit cost data, manufacturing process, raw material consumption ratios
4. Commissionerate verifies and grants a customised Brand Rate
5. Apply the Brand Rate on subsequent shipping bills

Documents needed for duty drawback:

• Shipping bill (with drawback declaration)
• Bill of lading or airway bill
• Bank Realisation Certificate (BRC) — required for post-realisation reconciliation
• GST returns showing the export
• Commercial invoice and packing list

Payment timeline: drawback typically credits to the IEC-linked bank account within weeks of LEO, subject to BRC reconciliation. Delayed BRCs are the most common cause of drawback hold-ups. See our Customs Documentation Made Simple for the broader documentation pipeline.

RoDTEP vs duty drawback (comparison)

Both schemes can apply to the same shipment in many cases. The exporter’s job is to verify rate eligibility per shipment and ensure the shipping-bill flags are set correctly.

Common mistakes that cost exporters money

• Forgetting to mark RoDTEP “yes” on the shipping bill. Once filed without the claim, no retro-claim is possible. Train your customs broker and add a pre-submission checklist.
• Using a wrong HS code. Rate mismatch leads to claim rejection or under-claim. The 8-digit HS code must match the product specification precisely.
• Failing to generate the e-scrip within the validity window. The credit lapses. Calendar this aggressively.
• Double-claiming on overlapping schemes. Advance Authorisation plus RoDTEP, or SEZ plus RoDTEP, is restricted. Verify the eligibility matrix before filing.
• Forgetting BRC reconciliation. Duty drawback realisation requires the BRC; long-pending BRCs delay or block the credit.
• Treating shipping bills filed under the courier-mode regime as eligible. Commercial exports above the courier-mode threshold must be filed under the standard shipping-bill regime to retain RoDTEP eligibility.

Surat-based textile and diamond exporters — both RoDTEP-eligible categories with significant export volumes — should run a monthly audit on their shipping-bill flags and scrip generation status to catch these errors early.

Recent changes and what to track

RoDTEP and duty drawback rates revise periodically through CBIC and DGFT notifications. Track:

• Sectoral inclusion/exclusion changes — steel, pharma, and chemicals have moved historically
• Rate revisions — published as scheduled CBIC notifications
• Per-unit cap revisions — often more impactful than the headline percentage rate
• Validity window changes for scrip generation
• Integration with the FTP review cycle — five-year policy updates and mid-term reviews

For broader compliance context, see our Trade Shipping Compliance Guide, which covers the full regulatory stack around export operations.

Frequently Asked Questions

What is the RoDTEP scheme and how is it different from MEIS?

RoDTEP (Remission of Duties and Taxes on Exported Products) is the WTO-compliant successor to MEIS, launched in January 2021. Unlike MEIS, which gave a flat-rate incentive, RoDTEP specifically refunds embedded taxes — VAT on fuel, electricity duty, mandi tax, stamp duty — that are not refunded under GST or duty drawback. Rates are notified at the 8-digit HS code level.

How much benefit can I expect under RoDTEP?

RoDTEP rates range from approximately 0.3% to 4.3% of FOB value depending on the product, with per-unit caps for many HS codes. The exact rate for your product is published by CBIC and viewable on ICEGATE. Refer to the latest notification for your 8-digit HS code before quoting the benefit to customers or building it into pricing.

Can I claim both RoDTEP and duty drawback on the same shipment?

Generally yes — they refund different things (RoDTEP refunds embedded indirect taxes; duty drawback refunds basic customs duty on imported inputs). However, certain combinations are restricted — for example, RoDTEP is not available on goods exported under Advance Authorisation or EOU/SEZ schemes. Always check the latest CBIC notification for overlap restrictions.

How do I receive the RoDTEP benefit?

The benefit is credited to the exporter’s ledger on ICEGATE as a transferable e-scrip. The scrip can be used to pay basic customs duty on future imports or sold/transferred to another IEC holder through the ICEGATE scrip-transfer module within the validity window prescribed in the latest notification.

What is the difference between All Industry Rate and Brand Rate duty drawback?

All Industry Rate (AIR) is the default rate published in the Drawback Schedule for each HS code, applied automatically based on shipping-bill declaration. Brand Rate is a customised rate granted when AIR does not adequately cover the basic customs duty on imported inputs — applied for under Rule 7 by filing Form ANF-7 with the jurisdictional Commissionerate.

Which products are excluded from RoDTEP?

Products manufactured or exported under Advance Authorisation, Export Oriented Units (EOU), SEZ units, and certain other notified categories are excluded. The full excluded list is in the latest DGFT/CBIC notification — verify your HS code before assuming eligibility. Periodically, sectors like steel and pharmaceuticals have moved in and out of the eligible list.

What happens if I forget to mark the RoDTEP claim on the shipping bill?

The claim is irretrievably lost for that shipment. Customs cannot retro-add a RoDTEP claim after the shipping bill is filed and Let Export Order is given. Always confirm with your customs broker that the RoDTEP yes flag is set on every eligible shipping bill before submission to avoid permanent loss of benefit.

Is RoDTEP available for shipments via international courier?

RoDTEP applies to exports filed under the standard shipping-bill regime. For low-value shipments cleared under Courier Imports and Exports Regulations, RoDTEP availability depends on the specific declaration mode used. For commercial exports above the courier-mode threshold, file under the standard shipping bill to retain RoDTEP eligibility.

Ship the goods, claim the scrip

RoDTEP and duty drawback are the two biggest financial levers available to an Indian exporter — yet most exporters either under-claim or forget the shipping-bill flag entirely. Get the HS code right, set the flag on every eligible bill, and calendar the scrip generation window. Then let CourierBook handle the international leg with a freight and courier partner that knows export documentation cold.