In a significant policy shift, the Directorate General of Foreign Trade (DGFT) has announced the restoration of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for exporters operating under Advance Authorization (AA) schemes. This decision, detailed in DGFT Circular dated 26th May 2025, marks a pivotal moment in India’s export landscape.
Background: The RoDTEP Scheme and Its Importance
Introduced in January 2021, the RoDTEP scheme was designed to refund various embedded duties and taxes on exported products that are not reimbursed under any other mechanism. Initially, exporters operating under AA schemes were excluded from this benefit. However, recognizing the critical role these exporters play in India’s trade ecosystem, the government has now extended these benefits to them.
Key Highlights of the 26th May 2025 Circular
Restoration of Benefits: The circular reinstates RoDTEP benefits for exports made under AA schemes, aligning with the government’s commitment to support all segments of the export community.
Eligibility Criteria: Exporters must ensure compliance with all procedural requirements and maintain accurate records to avail of the benefits.
Implementation Timeline: The restored benefits will be applicable for exports made on or after 1st June 2025.
Implications for Exporters
Enhanced Competitiveness: The restoration of RoDTEP benefits will reduce the cost of exported goods, making Indian products more competitive in international markets.
Financial Relief: Exporters can expect improved cash flows due to the remission of duties and taxes, aiding in better working capital management.
Compliance Requirements: Exporters must adhere to the guidelines set forth by the DGFT to ensure the smooth processing of their claims.
Conclusion
The restoration of RoDTEP benefits for AA holders is a strategic move by the government to bolster India’s export sector. By extending these benefits, the government acknowledges the challenges faced by exporters and aims to provide them with the necessary support to thrive in the global market. Exporters are encouraged to review the detailed circular and ensure compliance with all requirements to fully leverage the benefits of the RoDTEP scheme.
