Duty Drawback vs RoDTEP — Which to Claim, and Can You Claim Both

Duty Drawback vs RoDTEP explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Duty drawback refunds customs duties borne on inputs used in exported goods. RoDTEP remits embedded central, state and local duties and taxes not refunded elsewhere, credited as a transferable e-scrip. Both are claimed by declaring intent on the shipping bill at the time of filing.

They Remit Different Things

The confusion between the two comes from thinking of both as "export incentives". They are not incentives in design — they are remission mechanisms, and each targets a different unremitted burden.

Because they remit different burdens, the design intent is that they can coexist — but the operative question is always what the current notification says for your tariff line and for the scheme under which the goods were produced.

Duty Drawback in Outline

All Industry Rate

A standard rate notified against the tariff line, expressed as a percentage of FOB value usually with a cap per unit. It requires no proof of actual duty incidence, which is what makes it administratively simple. Post-GST, the AIR reflects the customs-duty element rather than the taxes now subsumed in GST.

Brand Rate

Where an exporter's actual duty incidence is materially higher than the AIR — because of a particular import-intensive input, for instance — a Brand Rate can be fixed for that exporter on application, supported by consumption data, input invoices and bills of entry. It is more work and it is worth it where the gap is large and the volume is regular.

RoDTEP in Outline

RoDTEP was introduced to remit duties and taxes embedded in the export product that no other mechanism refunds — the taxes paid on electricity used in manufacture, on fuel used in transport, local levies, and similar. Rates are notified per tariff line as a percentage of FOB value, frequently with a per-unit value cap.

The benefit is credited as a transferable e-scrip in the exporter's ledger on the customs system. It can be used to pay basic customs duty on your own imports, or transferred to another party — which matters for exporters who import little and would otherwise sit on unusable credit.

The Declaration That Decides Everything

Both benefits are claimed by declaring the intention to claim on the shipping bill, at the time of filing. This is where entitlement is won or lost.

• If the declaration is omitted, the claim is generally lost for that shipment. Retrospective addition is difficult and often impossible.
• The declaration is usually made by the customs broker from the instructions you give them. If your instructions are silent, the default may not be what you want.
• The correct tariff line must be declared, since rates attach to tariff lines.
• The bank account registered against the AD Code must be correct, or the cash drawback has nowhere to go.

Build this into your shipping instruction template: a standing line stating which claims are to be declared for each product, reviewed whenever notifications change.

Where Exclusions Bite

Scheme interaction is where errors are expensive, and it is also where the rules have changed more than once. Exports made under duty exemption schemes, from export oriented units, from special economic zones and under bonded manufacturing have at various times been excluded from, or brought into, RoDTEP. Similarly, drawback of the customs portion interacts with whether inputs were imported duty-free.

Rather than relying on a general rule, check three things per product line before shipping:

1. The current RoDTEP notification — is your tariff line listed, at what rate and cap, and are there scheme exclusions that apply to you?
2. The current drawback schedule — the AIR for your tariff line, and whether a Brand Rate is worth pursuing.
3. The scheme under which the goods were produced — advance authorisation, EOU, SEZ, MOOWR or none.

Getting the Money Actually Credited

Declaring the claim is necessary but not sufficient. The credit follows confirmation that the export happened:

1. Shipping bill filed with the claim declaration and correct tariff line.
2. Let Export Order issued.
3. Carrier files the EGM.
4. Shipping bill and EGM matched on the customs system.
5. Drawback credited to the registered bank account; RoDTEP scrip generated in the ledger.
6. Exporter generates and, if desired, transfers the scrip.

An unfiled or erroneous EGM stops both. This is why the monthly EGM reconciliation is worth doing.

Practical Tips

• Maintain a product master listing, per tariff line, the drawback AIR and the RoDTEP rate and cap in force, with the date last checked.
• Give the customs broker written standing instructions on which claims to declare, and audit a sample of shipping bills against them.
• Where an input is import-intensive, model whether a Brand Rate materially beats the AIR before dismissing the application effort.
• Generate and use or transfer RoDTEP scrips promptly; validity periods apply.
• Reconcile expected against received credit monthly, by shipping bill — unclaimed entitlement does not announce itself.
• Re-check the notifications after every budget and every FTP amendment; rates and exclusions move.

Related Services & Guides

• Duty Drawback on Exports — Section 74/75
• RoDTEP Scheme
• EGM and Proof of Export
• More Guides