Both schemes refund embedded costs on exported goods, and both are decided by what you declare at Shipping Bill stage. Claim them wrong there and the money is usually gone for good.
Indian exporters have two main mechanisms for recovering taxes and duties embedded in exported goods. They work differently, they are claimed differently, and in most cases you cannot have both on the same product.
The critical point for both: the claim is made on the Shipping Bill, at the time of export. Neither is something you sort out afterwards.
RoDTEP
Remission of Duties and Taxes on Exported Products refunds embedded central, state and local levies that no other mechanism returns — VAT on fuel used in transport, electricity duty, mandi tax, stamp duty and similar.
The principle behind it is that you export goods, not taxes. It replaced the older MEIS scheme after that was found incompatible with WTO rules.
How it works
- Rates are notified per HS code, generally a low single-digit percentage of FOB value, often with a per-unit value cap
- You declare the RoDTEP claim in the Shipping Bill at filing
- Benefit is issued as a transferable electronic scrip in your ICEGATE credit ledger
- Scrips offset Basic Customs Duty on your own imports, or can be sold to another importer
What is excluded. Goods exported from an SEZ or EOU, products already covered by Advance Authorisation, re-exported imported goods, and a list of ineligible categories. Check your HS code against the current notification rather than assuming.
Duty drawback
Drawback refunds the customs duty paid on imported inputs that were used to make the exported product. Different logic entirely: RoDTEP addresses untaxed-but-embedded levies, drawback returns duty you actually paid at import.
Two routes
All Industry Rate. A standard percentage notified per HS code, applied without proving what you actually imported. Simple, and what most exporters use. Rates come in two forms — one where you have taken input tax credit and a higher one where you have not.
Brand Rate. Where the AIR does not exist for your product, or materially understates your actual duty incidence, you can apply for a rate specific to your business, supported by consumption and duty-payment evidence. More work, better recovery where input duties are heavy.
Which applies to you
| RoDTEP | Duty drawback | |
|---|---|---|
| Refunds | Embedded local levies | Customs duty on imported inputs |
| Claimed via | Shipping Bill declaration | Shipping Bill declaration |
| Paid as | Transferable e-scrip | Direct bank credit |
| Needs imported inputs | No | Yes, in substance |
| Typically used by | Most merchandise exporters | Manufacturers using imported inputs |
Generally you claim one or the other per product. Where both are technically available, work out which recovers more before you file — the choice is locked once the Shipping Bill is lodged.
How the claim actually flows
- Declare the scheme and reward on the Shipping Bill at filing
- Goods are exported and the carrier files the EGM
- The system matches the EGM against the Shipping Bill
- Drawback is credited to your registered bank account; RoDTEP scrips appear in the ICEGATE ledger
- Generate and, if selling, transfer the scrip
Everything after step 1 is automatic — and entirely dependent on step 1 being right.
The mistakes that forfeit the money
Not declaring at filing. There is no retrospective claim in the ordinary course. A Shipping Bill filed without the declaration generally forfeits the benefit.
Wrong Shipping Bill type. The type must match the scheme.
Bank account not registered on ICEGATE, or registered and since closed. Drawback credit fails silently and sits unpaid.
EGM mismatch. The single most common cause of a refund that never arrives. The carrier's manifest must match your Shipping Bill.
Wrong HS code. Rates are notified per code. Misclassify and you claim the wrong rate — too little, or too much and a recovery notice later. See how to find the right HS code.
Letting scrips expire. RoDTEP scrips carry a validity period. Use them against your own imports or sell them before it lapses.
Missing realisation. Benefits are contingent on export proceeds actually being realised. Unrealised exports can trigger recovery.
Worth knowing
These are not the only options. Advance Authorisation lets you import inputs duty-free against an export obligation, and EPCG does the same for capital goods. Both are usually better than drawback where your import duty incidence is high and your export volumes are predictable, but both carry obligations that must be fulfilled and closed out.
Related reading
- Export customs clearance — the Shipping Bill process these claims ride on
- Customs duty in India — what you are recovering
Not sure which scheme leaves you better off, or whether your refunds have stalled on an EGM mismatch? Send us your product and HS code.
