RoDTEP extended to December 2026; RELIEF export cover to March 2027
The Department of Commerce has extended the RoDTEP scheme, which refunds taxes embedded in exported goods, to 31 December 2026 at unchanged rates, it announced on 2 October 2026. A separate notification extended Component II of RELIEF, which supports ECGC insurance with 95% risk coverage for shipments to the Gulf and West Asia, to 31 March 2027.
Syllabus: GS3 · Indian Economy & Growth; GS3 · Liberalisation & Industry; GS2 · International Institutions
Why it matters
An engineering or leather exporter pays VAT on the diesel that trucks goods to port, duty on factory electricity and other levies that GST does not refund. RoDTEP returns part of that cost as a percentage of the free-on-board value, so India's goods exports do not carry domestic taxes into foreign markets. Three more months at unchanged rates let exporters price orders up to December with certainty. For a small firm shipping to the UAE or Saudi Arabia, Component II of RELIEF means most of a war-related loss on a consignment is insured, at the premium it paid before the disruption, so Gulf orders need not be turned away.
Prelims pointers
- RoDTEP: a Department of Commerce scheme, notified by the DGFT under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, read with the Foreign Trade Policy 2023.
- RoDTEP rebate: issued as transferable e-scrips kept in an electronic ledger of the Central Board of Indirect Taxes and Customs; some items carry per-unit value caps.
- MEIS: a WTO panel in 2019, on a United States complaint (dispute DS541), found it a prohibited export subsidy; RoDTEP, operational since 1 January 2021, replaced it.
- WTO Agreement on Subsidies and Countervailing Measures: subsidies contingent on export performance are prohibited; remitting indirect taxes on exported goods, up to the amount levied, is not a subsidy.
- ECGC Ltd: export credit insurer set up in 1957, wholly owned by the Government of India, under the Ministry of Commerce and Industry.
- Export Promotion Mission: announced in Union Budget 2025-26; Niryat Protsahan (trade finance) and Niryat Disha (non-financial support); DGFT is the implementing agency.
- When RoDTEP rates were first notified in August 2021, apparel and made-ups got similar rebates under the Ministry of Textiles' RoSCTL scheme.
- Zero-rating of exports: RoDTEP works alongside duty drawback and IGST refunds so that domestic taxes are not exported.
Practise a UPSC-style question
With reference to the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, consider the following statements:
1. It refunds levies outside GST, such as VAT on fuel used in transport and mandi tax, borne on exported products.
2. Its benefit is issued as transferable e-scrips held in an electronic ledger maintained by the Reserve Bank of India.
3. Its rebate is notified as a percentage of the free-on-board value of exports.
Which of the statements given above is/are correct?
- (a) 1 and 2 only
- (b) 2 and 3 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Show the answer
Answer: (c) 1 and 3 only
1 is correct: RoDTEP covers embedded taxes that GST does not refund, such as VAT on transport fuel, mandi tax and duty on electricity. 2 is incorrect: the e-scrips sit in an electronic ledger of the Central Board of Indirect Taxes and Customs, not the Reserve Bank of India. 3 is correct: rates are a percentage of the free-on-board value, with per-unit value caps on some items.