Every rupee of tax and duty you pay while making an export product makes your price less competitive abroad. India runs two important schemes to give some of that back: RoDTEP and duty drawback. For steel and engineering exporters working on thin margins, claiming them correctly can decide whether an order is profitable.
Note: rates, eligibility and scheme rules change through government notifications. Always check the current schedule and your product's HS code before relying on any benefit in your pricing.
What is duty drawback?
Duty drawback refunds customs and certain other duties paid on imported or domestic inputs used to make exported goods. It is governed by the Customs and Central Excise Duties Drawback Rules.
There are two routes:
- All Industry Rate (AIR): standard rates notified for each drawback tariff item, usually as a percentage of FOB value, sometimes with a cap per unit. This is what most exporters use.
- Brand rate: for exporters whose actual duty incidence is higher than AIR, a specific rate can be fixed by the authorities based on actual data.
Drawback is typically credited directly to the exporter's bank account once the shipping bill is processed.
What is RoDTEP?
RoDTEP (Remission of Duties and Taxes on Export Products) refunds embedded taxes that are not refunded under any other scheme — for example, duties on fuel used in transport, electricity duty, mandi tax and stamp duty on export documents. It replaced the earlier MEIS scheme.
Key features:
- rates are notified per HS code as a percentage of FOB value, often with a value cap per unit,
- benefits are issued as electronic duty credit scrips in the exporter's ledger on ICEGATE,
- scrips can be used to pay basic customs duty on imports or transferred (sold) to other importers,
- certain categories and products are excluded, so check eligibility.
How the two schemes work together
Drawback and RoDTEP refund different taxes, so in most cases an exporter can claim both on the same shipment. Your product's HS code determines the drawback serial number and the RoDTEP rate. That is why correct classification matters — see HS codes for steel pipes, fittings and flanges.
How to claim: step by step
- Classify correctly. Confirm the 8-digit ITC-HS code with your customs broker.
- Declare in the shipping bill. Make the drawback and RoDTEP claims at the time of filing. Missed declarations are very hard to fix later.
- Keep bank details updated on ICEGATE for drawback credits.
- Track the shipping bill status after export (EGM filed, let export order given).
- Generate RoDTEP scrips on ICEGATE once credits appear in your ledger.
- Use or sell scrips — pay import duty or transfer to buyers through the portal.
- Realise export proceeds within the time allowed by RBI rules. Benefits can be recovered if payment is not realised.
Example of the impact
Suppose you export stainless steel fittings worth USD 50,000 FOB. Even a combined benefit of a few percent of FOB value can add up to several thousand dollars over a year of shipments — often more than your net margin on a single order. Factor expected benefits into your export pricing, but price conservatively in case rates change.
Common mistakes that cost exporters money
- Wrong HS code — leads to wrong or rejected claims and possible penalties.
- Not ticking the claim in the shipping bill.
- Mismatch between invoice and shipping bill descriptions or values.
- Delayed payment realisation beyond the permitted period.
- Letting scrips expire — RoDTEP scrips have a validity period; use or sell them in time.
- Ignoring caps — some rates have a per-unit cap, so high-value items may get less than the percentage suggests.
Selling RoDTEP scrips
If you do not import enough to use your scrips, you can sell them to importers through brokers or directly via ICEGATE transfer. Scrips usually trade at a small discount to face value. Compare offers and keep records for accounting.
Accounting and GST
Treat drawback and RoDTEP as export incentives in your books. Discuss with your chartered accountant how they are recognised as income and taxed. Keep shipping bills, invoices, BRCs/e-BRCs and scrip records organised for audits.
Where to get help
- Your customs broker (CHA) for classification and shipping bill filing.
- EEPC India for engineering product guidance and updates.
- DGFT and CBIC notifications for current rates and rules.
New to exports? Start with our guide on how to start a steel export business from India and the export documents checklist.
Frequently asked questions
Can I claim both RoDTEP and drawback?
In most cases yes, because they refund different taxes and duties. Check eligibility for your product and export route.
How are RoDTEP benefits received?
As electronic duty credit scrips in your ICEGATE ledger, which can be used to pay import duty or transferred to others.
Is RoDTEP available on all steel products?
No. Rates are product-specific and some items or export routes are excluded. Check the current schedule for your HS code.
What happens if payment is not received from the buyer?
Benefits claimed on that shipment can be recovered if export proceeds are not realised within the permitted period.
Key takeaways
- Drawback refunds duties on inputs; RoDTEP refunds other embedded taxes.
- Both depend on the correct HS code and a claim in the shipping bill.
- RoDTEP comes as transferable scrips; use or sell them before expiry.
- Build expected benefits into pricing carefully and keep records clean.
Small percentages on every shipment add up to real money. Make claiming them part of your standard export process.
