RoDTEP and RoSCTL Extended to December 2026: E-Scrip Benefits

RoDTEP and RoSCTL Schemes Extended upto 31.12.2026: A Guide to Earning and Utilising Duty Credit Scrips

Summary: The Government has extended the RoDTEP and RoSCTL export remission schemes up to 31 December 2026, continuing the existing rates and value caps applicable as on 30 September 2026. The article explains the statutory framework under Section 51B of the Customs Act, 1962 and the Electronic Duty Credit Ledger Regulations, 2021, including the procedure for earning, creating, transferring and utilising electronic duty credit scrips. RoDTEP covers eligible export products outside the apparel and made-ups categories covered by RoSCTL. Illustrations explain the calculation of ₹25,000 RoDTEP credit on exports worth ₹50 lakh at an assumed 0.5% rate and ₹98,000 RoSCTL credit on garments worth ₹20 lakh at an assumed 4.9% rate, subject to applicable notified rates and caps. The credit is not a cash refund but can be utilised against eligible Basic Customs Duty on imports or transferred to another person for consideration. The article also highlights the two-year validity period for e-scrips, the importance of correct tariff classification and shipping bill declarations, and the need for timely utilisation of earned credits.

The Article explains how RoDTEP and RoSCTL schemes are operationalised in the context of the extension of these schemes upto 31.12.2026. The relevant provisions with examples on how the scheme help reducing the duty burden of BCD on imports to the exporter and how the e scrip is transferred and its usage within time limit of two years.

Statutory Framework for Electronic Duty Credit

The Government has provided a statutory mechanism for issue and utilisation of duty credit under export remission schemes through Section 51B of the Customs Act, 1962. Section 51B, inserted by the Finance Act, 2020, provides for issue of duty credit in lieu of remission of duties, taxes or levies and for maintenance of such credit in the Customs automated system in the form of an electronic duty credit ledger. It further provides that the duty credit available in such ledger may be used by the person to whom it is issued or transferred, towards payment of duties payable under the Customs Act or the Customs Tariff Act, subject to the prescribed conditions and restrictions. In exercise of the powers under Section 51B read with Section 157 of the Customs Act, the CBIC notified the Electronic Duty Credit Ledger Regulations, 2021. These Regulations provide the mechanism for issuance of duty credit, creation and registration of e-scrips, their utilisation and transfer. It may be noted that the Regulations define an “e-scrip” as the scrip created in the electronic duty credit ledger and define the “Scheme” to include both schemes of Remission of Duties and Taxes on Exported Products (RoDTEP) and Rebate of State and Central Taxes and Levies (RoSCTL).

Extension of RoDTEP and RoSCTL Schemes up to December 31, 2026

2. With the above regulations in mind, it is important to know for the benefit of the exporters that the Directorate General of Foreign Trade (DGFT) has extended the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme up to December 31, 2026, vide Notification No. 41/2026-27 dated September 30, 2026. The Scheme is available for eligible exports made by Domestic Tariff Area units, Advance Authorisation holders, Special Economic Zone units and Export Oriented Units. It may be noted that the existing RoDTEP rates and value caps notified in Appendix 4R and Appendix 4RE, as applicable on September 30, 2026, will continue unchanged during the extended period.

3. The RoDTEP Scheme covers more than 10,000 export items, other than the apparel, garments and made-ups which are covered by RoSCTL. The applicable RoDTEP rates and value caps are prescribed by the DGFT in Appendix 4R and Appendix 4RE, depending upon the category of exporter and the relevant export item. Further, the Ministry of Textiles has extended the RoSCTL Scheme for exports of apparel, garments and made-ups for a further period of three months from October 1, 2026 to December 31, 2026 as per the PIB release. The prevailing rates and caps will continue during the extended period.

4. These extensions are significant for exporters because both schemes seek to ensure that certain duties, taxes and levies which remain embedded in exported goods are remitted or rebated, so that such domestic incidence does not adversely affect the competitiveness of Indian products in international markets. Though RoDTEP and RoSCTL are different schemes applicable to different categories of exports, the benefit under both is made available through the electronic duty credit mechanism under the said Regulations. It would therefore be useful to understand not merely how an exporter earns the benefit, but also how that benefit can actually be used.

RoDTEP Benefit Calculation and Applicable Value Caps

5. The basic idea behind RoDTEP is that an exporter should not bear certain duties, taxes and levies which are incurred in the process of manufacture or production of goods and which are not refunded, or given as credit. The benefit is determined with reference to the eligible export product, its FOB value and the rate prescribed for that product, subject to the applicable value cap. The rates are prescribed product-wise by the DGFT after taking into account the incidence of eligible duties, taxes and levies.

6. Let us take an example. Consider an exporter of instantaneous gas water heaters falling under Customs Tariff Item 8419 11 10. In the RoDTEP schedule, this item has been shown under RoDTEP Entry No. 8167 as “Domestic type”. The RoDTEP schedule specifies the rate. For illustration, if an export of such goods has an FOB value of 50 lakh rupees and the applicable rate is taken as 0.5 per cent, the benefit works out to 25,000 rupees, subject to the applicable value cap and the rate actually in force for the relevant period. However, maximum benefit would be subject to value cap in case of certain items. Thus, the exporter has to examine both the notified rate and the applicable cap rather than merely applying the percentage to the FOB value.

Creation of E-Scrips and Utilisation Against Basic Customs Duty

7. It may be noted that the exporter does not receive this 25,000 rupees as a cash refund in his bank account. After the export claim is processed and allowed in accordance with the prescribed procedure, the eligible duty credit is generated electronically in terms of the provisions of Electronic Duty Credit Ledger Regulations, 2021. The exporter can create an e-scrip in the electronic duty credit ledger. Thus, the e-scrip is not a cash payment but represents the duty credit earned by the exporter under the scheme. The said Electronic Duty Credit Ledger Regulations provides for the claim to be made at the item level in the shipping bill or bill of export and prescribe the subsequent process for creation of the e-scrip.

8. Further, the benefit under RoDTEP is available through e-scrip for payment of Basic Customs Duty on eligible imports. It cannot be used for payment of IGST, Social Welfare Surcharge, Agriculture Infrastructure and Development Cess or other import levies. This distinction is important because the total amount payable at the time of import consists of several components, whereas the duty credit is available only for the duty specified under the governing provisions.

RoSCTL Scheme Coverage and Rebate Calculation

9. The RoSCTL Scheme operates on a similar electronic duty credit principle, but its coverage is different. It is meant for exports of apparel and garments falling under Chapters 61 and 62 and made-ups falling under Chapter 63, subject to the prescribed conditions. The objective is to rebate embedded State and Central taxes and levies which are not refunded through other mechanisms. The Ministry of Textiles prescribes the applicable rates and caps under the RoSCTL Scheme. The present extension continues the existing scope, rates, caps and other conditions applicable as on September 30, 2026.

10. A specific example may be taken of a knitted cotton T-shirt falling under chapter 6109 10 00 of the First Schedule to Customs Tariff Act,1975. Such an item is within the broad category of apparel/garments covered by RoSCTL, subject to the conditions and the applicable RoSCTL schedule. Suppose an exporter exports such T-shirts with an FOB value of 20 lakh rupees. If the applicable RoSCTL rate for T shirt is taken as 4.9 per cent, the rebate would work out to 98,000 rupees. The said rebate amount would not be paid as a cash refund. It would be made available as duty credit through the prescribed electronic mechanism as provided in Electronic Duty Credit Ledger Regulations, 2021.

Utilisation and Transfer of Duty Credit E-Scrips

11. An exporter who regularly imports goods can directly use the credit to discharge the Basic Customs Duty payable on such imports. In this manner, there is an economic link between the export activity and the import activity of the exporter. The exporter earns the benefit because of the export and subsequently uses the credit to reduce the BCD burden on eligible imports.

12. It may be noted that the practical benefit of these RoDTEP and RoSCTL schemes is not confined to the exporter who earns the credit. The duty credit is transferable as e-scrip for a commercial consideration. An exporter may not necessarily have an immediate requirement to import goods. In such a situation, instead of allowing the credit to remain unused or lapsed, the exporter can transfer the e-scrip to another person as per the provisions of the said 2021 Regulations. The transferee can thereafter utilise the transferred credit for payment of eligible Basic Customs Duty.

Two-Year Validity Period of E-Scrips

13. However, exporters need to be careful about the validity period of the e-scrip. Under the Electronic Duty Credit Ledger Regulations, the validity period was initially one year but was subsequently extended to two years by the Electronic Duty Credit Ledger (Amendment) Regulations, 2022. The two-year period is relevant both for utilisation of e-scrip by the exporter or the transferee of the e-scrip. An exporter should therefore keep track of the date of creation of each e-scrip. The credit cannot be treated as an everlasting entitlement merely because it was originally earned against a valid export.

Compliance Requirements for Exporters and Practical Benefits

14. Further, the distinction between earning the credit and utilising the credit is important from the point of view of an exporter. At the time of export, the exporter should correctly identify the tariff item, ascertain whether the item is covered under the applicable scheme and make the appropriate declaration in the shipping bill. The benefit is thereafter determined according to the rate and cap prescribed for that item, if any. Once the credit is generated in the electronic ledger, the exporter needs to decide whether to use it for his own eligible imports or transfer it to another eligible holder. Thus, proper classification at the export stage and proper utilisation at the subsequent stage are both important.

15. The extension of both schemes up to December 31, 2026 therefore provides continuity to exporters during the extended period. Both RoDTEP and RoSCTL schemes will continue with the rates and value caps applicable as on September 30, 2026.

Author: K. Raji Reddy, IRS (C&IT), Asst. Commissioner of Customs and GST (Retired).

(The above are personal views of the author.)