RoDTEP vs Duty Drawback: Which One Should Indian Exporters Claim?

Two of the most valuable export incentive schemes for Indian exporters are RoDTEP and Duty Drawback. Most exporters know one but not both. Some claim neither because the process seems complicated. This post explains both clearly so you know exactly what you are entitled to.

What is Duty Drawback?

Duty Drawback is the refund of customs duty you paid on imported raw materials or inputs that were used to manufacture your export product. If you imported aluminium, chemicals, or components and paid import duty on them, and then used those inputs to make something you export, you can get that customs duty back. The refund is calculated either as an All Industry Rate set by the government for your HS code, or as an actual cost-based rate specific to your company if your costs exceed the AIR.

What is RoDTEP?

RoDTEP (Remission of Duties and Taxes on Exported Products) was introduced in 2021 to replace MEIS. Unlike Duty Drawback which covers customs duty on imported inputs, RoDTEP covers taxes embedded in your product that are not otherwise refundable. This includes state levies like mandi tax, electricity duty on manufacturing, stamp duty, and central taxes not covered by other schemes. The refund comes as a transferable scrip credited to your ICEGATE account.

Can You Claim Both?

Yes, on the same shipment in many cases. Duty Drawback covers import-side taxes. RoDTEP covers domestic production-side taxes. They do not overlap, provided your shipping bill declarations correctly indicate which scheme you are claiming under. Your CHA and compliance consultant need to ensure the declarations are right from day one.

Which One is Worth More?

It depends on your product, your input sourcing, and your production structure. Duty Drawback is typically more valuable if you use significant imported inputs. RoDTEP is more relevant if your production involves heavy domestic state-level costs. A leather goods exporter importing hardware components will benefit more from Drawback. A spice processor using fully domestic inputs will find RoDTEP more relevant. Many exporters benefit meaningfully from both simultaneously.

The Most Common Mistake

The biggest mistake is claiming only one and assuming the other does not apply, or worse, claiming neither because the process looks confusing. Rasp International conducts incentive audits for exporters who have been shipping for 12 months or more. In the majority of cases we find unclaimed credits that are legally owed to the exporter but never filed for. If you have been exporting for over a year, it is worth a conversation at [email protected].