Supplier Notes · Trade & Compliance · General
Every export shipment carries embedded costs that never show up on the commercial invoice — the fuel tax on the truck that hauled the fabric to the mill, the electricity duty baked into the dyeing process, the mandi tax on the raw cotton. None of that gets refunded through GST, because GST only covers taxes on the finished product, not the layered state and central levies sitting underneath it. That gap is exactly what RoDTEP exists to close.
What RoDTEP actually covers
The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, which replaced the older MEIS scheme from January 2021, refunds the embedded, non-creditable central and state taxes and duties that a GST refund or duty drawback doesn’t reach — things like VAT on fuel used in transportation, mandi tax, electricity duty, and stamp duty on export documentation. It is explicitly designed to be WTO-compliant, since it refunds actual embedded taxes rather than subsidizing exports outright, which is why it replaced MEIS after MEIS was challenged at the WTO as an impermissible export subsidy.
How the rate works, and why it varies by product
RoDTEP refunds are calculated as a percentage of the FOB (Free on Board) value of the exported product, with the applicable rate set separately for each HS code and notified in Appendix 4R under the Foreign Trade Policy. Because the rate is meant to reflect the actual embedded tax burden for that specific product category — which varies by how much domestic processing, dyeing, and transportation goes into it — rates differ meaningfully across HS codes even within the same broad textile chapter. For a made-ups exporter, this means the RoDTEP percentage that applies to a finished, dyed and stitched bed-linen shipment can differ from the rate on a simpler grey-fabric export, even though both fall under HS Chapter 63 or nearby headings.
Because rates are notified per HS code and are periodically reviewed, the reliable way to know your actual entitlement is to check the current Appendix 4R rate for your specific product’s HS code at the time of shipment — not to assume last year’s rate, or a rate you saw quoted for a neighbouring HS code, still applies.
How to actually claim it
- Declare your intent to claim RoDTEP on the shipping bill itself — this has to be done at the time of export filing, not added retroactively after the shipment has cleared.
- The system auto-computes the refund based on the FOB value and the notified rate for your product’s HS code, generating a scroll through the ICEGATE customs platform.
- The refund is issued as transferable electronic scrips (duty credit), which can be used to pay basic customs duty on future imports, or sold/transferred to another importer if you don’t have an immediate use for them.
- Scrips must be claimed within their validity window and used or transferred before expiry — letting them lapse unused is a common and entirely avoidable way exporters leave money on the table.
The mistake that costs exporters the most
The single most common error isn’t a missed declaration — it’s misclassification. A shipping bill filed under the wrong HS code doesn’t just risk a customs query; it can mean claiming the wrong RoDTEP rate entirely, either underclaiming a legitimate refund or triggering a compliance flag for overclaiming. For a mill exporting multiple product lines — bed linen, terry towels, and made-ups under different sub-headings of HS Chapter 63 — getting each shipping bill’s classification right, line by line, is worth more in aggregate RoDTEP accuracy than almost any other single documentation step in the export process.
Why this matters more now, not less
For mills that took a margin hit from 2025’s tariff pressure in major export markets, RoDTEP isn’t a bonus — it’s a real, government-notified percentage of every FOB dollar that either gets claimed correctly or doesn’t. On a mill’s full annual export volume, the difference between filing shipping bills with the correct HS classification every time and getting it wrong on a meaningful share of shipments can be a material swing in realized margin, entirely within the exporter’s control.
Celeris Exim works with export-ready Indian mills to confirm correct HS classification and documentation practice before shipments go out — so RoDTEP, drawback, and CEPA claims are captured accurately the first time, not corrected after the fact.
Sources: Foreign Trade Policy, Appendix 4R, DGFT · RoDTEP scheme guidelines, Ministry of Commerce and Industry · ICEGATE customs platform, scrip issuance process