Government Restores Remission of Duties and Taxes on Exported Products (RoDTEP)

Context

The Ministry of Commerce and Industry has reinstated RoDTEP benefits for Advance Authorisation holders, SEZs, and EOUs from June 1, 2025, via DGFT Notification No. 11/2025-26. This reverses the earlier withdrawal and aims to boost export competitiveness, especially for sectors like pharmaceuticals.

RoDTEP Scheme:

Launched: January 1, 2021.
Objective: To refund embedded taxes/duties not reimbursed under any other schemes (e.g., electricity duty, VAT on fuel, Mandi tax).
Basis: Aligned with WTO norms; replaces MEIS (Merchandise Exports from India Scheme).
Legal Framework: Section 5 of the Foreign Trade (Development and Regulation) Act, 1992.

Eligibility and Beneficiaries:

Initially covered all sectors; later excluded AAs, SEZs, and EOUs from February 6, 2025.
These exclusions have now been reversed, restoring parity among exporters operating under various schemes.
Appendix 4RE (updated as per Finance Act, 2025) contains new HS code-linked rates.

Export Promotion Schemes Involved:

Advance Authorisation (AA): Allows duty-free import of inputs for export production.
Special Economic Zones (SEZs): Deemed foreign territory for trade operations; incentivized through fiscal concessions.
Export-Oriented Units (EOUs): Set up for 100% export with duty-free inputs under EPCG/FTPs.

Importance for Pharma Sector:

Major share of pharma exports are routed through AAs, SEZs, and EOUs.
Withdrawal of RoDTEP benefits had increased operational costs and reduced price competitiveness.
Reinstatement ensures a level playing field with Domestic Tariff Area (DTA) units and sustains India’s global pharma supply chain participation.