Duty Drawback vs RoDTEP: What Each One Gives Back, and Claiming Both

What each one actually gives back

The two get compared as though they were alternatives because both are called export incentives and both come off the same shipping bill. They are not alternatives, and the reason is in what each one is a refund of.

Duty drawback is made under section 75 of the Customs Act, 1962 read with section 37 of the Central Excise Act, 1944. The operative rules are the Customs and Central Excise Duties Drawback Rules, 2017, notified by Notification No. 88/2017-Customs (N.T.) dated 21 September 2017 and in force from 1 October 2017. Rule 2(a) defines drawback as "the rebate of duty excluding integrated tax leviable under sub-section (7) and compensation cess leviable under sub-section (9) respectively of section 3 of the Customs Tariff Act, 1975 chargeable on any imported materials or excisable materials used in the manufacture of such goods". Read the exclusion inside the definition: after GST, drawback gives back the customs duty borne on your inputs, and it does not give back the integrated tax or the compensation cess, which have their own routes.

RoDTEP starts from the other end. It remits what nothing else gives back, which is why condition 2(1)(a) of Notification No. 76/2021-Customs (N.T.) dated 23 September 2021 issues duty credit only "in lieu of remission of any duty or tax or levy ... where such duty or tax or levy is not exempted, remitted or credited under any other Scheme". Its own name is the remission of duties and taxes on exported products, and the credit is created in the electronic ledger rather than paid out.

Where they differ in practice

• How the rate is arrived at. Drawback rates are determined by the Central Government under rule 3 and published as the All Industry Rates schedule, which is revised by notification from time to time, so the schedule to read is the one in force for your export date. Two routes exist for an exporter the schedule does not fit: rule 6, where no rate has been determined for the goods at all, and rule 7, where the determined rate "is less than eighty per cent. of the duties paid on the materials or components used in the production or manufacture of the said goods". Both are applications to the Principal Commissioner or Commissioner of Customs having jurisdiction over the place of export, within three months. RoDTEP has no equivalent in the instruments quoted here: its rates are notified against the tariff line, which is the difference the last section of this page returns to. How RoDTEP rates are calculated covers that side.
• What you are left holding. Drawback is an amount paid to the exporter, and rule 18 makes that plain from the other direction: where drawback "has been paid to an exporter or a person authorised by him" and the sale proceeds are not realised within the period allowed under the Foreign Exchange Management Act, 1999, it is recovered from that claimant. It is personal to the exporter and there is nothing to hand on. RoDTEP produces a scrip in the ledger, which its holder can apply against their own customs duty or transfer to somebody who will. For an exporter who imports little or nothing, that is the whole difference: selling the scrip is how the credit becomes cash at all.
• When the claim is made. Under rule 14(1), the electronic shipping bill filed under a claim of drawback is itself "deemed to be a claim for drawback filed on the date on which the proper officer of Customs makes an order permitting clearance and loading of goods for exportation under section 51". The RoDTEP claim is made on the same document by declaration at item level. Two claims, one bill, and the next section is why that is allowed.

The short answer on claiming both, and the instrument behind it

Both can be claimed. The customs system is explicitly built to process them together: ICEGATE Advisory No. 01/2021 provides that "the Shipping Bills with RoDTEP and/or Drawback claim will now be routed for officer intervention based on Risk based targeting by RMS", and that once processed "for DBK and/or RoDTEP either by the officer or as per facilitation by RMS, it will move to the respective scroll queues".

The ICEGATE e-scrip advisory is more direct still. Describing the mechanism in place from 1 January 2021 it records that RoDTEP claims were "processed by the officers (under DBK_AC role) along with drawback processing", and elsewhere it states plainly that "the RoDTEP claim was allowed in addition to Drawback".

The rule people are actually thinking of

There is a real restriction. It is just not the one usually quoted. Condition 2(1)(a) of Notification No. 76/2021-Customs (N.T.) dated 23 September 2021 provides that duty credit is issued "in lieu of remission of any duty or tax or levy, chargeable on any material used in the manufacture or processing of goods or for carrying out any operation on such goods in India that are exported, where such duty or tax or levy is not exempted, remitted or credited under any other Scheme".

Read the object of that sentence. The thing that must not have been remitted elsewhere is "such duty or tax or levy", singular and specific. Para 4.54(ii) of the Foreign Trade Policy 2023 states the same idea from the policy side: "the rebate under the Scheme shall not be available in respect of duties and taxes already exempted or remitted or credited."

So the bar is on being remitted the same levy twice. It is not a bar on running two schemes over one export, and nothing in either instrument makes the presence of a Drawback claim on a shipping bill disqualify a RoDTEP claim on it.

The two schemes were designed around this. Drawback rebates customs duties on imported inputs; RoDTEP is written to remit duties, taxes and levies that are not refunded under any other mechanism, which is why its own name is a remission of what nothing else gives back. Different levies, one export.

The scheme that genuinely does exclude RoDTEP

If you are looking for the mutual exclusion you half remember, it is RoSCTL rather than Drawback. RoSCTL applies to apparel and made-ups in the relevant chapters in exclusion of RoDTEP for those chapters: an item takes one or the other, not both. That is a real either-or and it is worth being clear that Drawback is not treated the same way anywhere in the instruments. RoDTEP vs RoSCTL covers which applies to what.

What you are signing when you claim both

The undertaking behind statement code RD001, set out in Annexure B to ICEGATE Advisory No. 01/2021, includes that the claim "is not with respect to any duties or taxes or levies which are exempted or remitted or credited under any other mechanism outside RoDTEP". Claiming both is not a loophole you are exploiting; it is a position you are certifying, and the certificate is at levy level.

In practice that puts the work in the same place the condition does. Whether a specific levy has already been remitted under Drawback, or under an exemption on inputs, or under another scheme, is a question about your own facts. It is the reason RODTEPY should not be a default tick on a broker's template, and the reason the answer for an Advance Authorisation holder is more involved than for a plain Domestic Tariff Area export: RoDTEP for Advance Authorisation, EOU and SEZ covers that route.

Two practical consequences

• A suspension travels. ICEGATE Advisory No. 01/2021 provides that where a suspension is placed on an exporter or a shipping bill for Drawback, "the same will also be applicable for the purpose of scrolling out of RoDTEP benefits". So a Drawback problem can hold up a RoDTEP scroll even though the claims are separate, which is worth knowing before you go looking for a RoDTEP-specific cause. RoDTEP scroll not generated covers the other causes.
• They are claimed differently. Drawback uses a schedule serial number. RoDTEP does not: Advisory No. 01/2021 says that "unlike Drawback, there is no separate serial numbers based on a schedule for claiming RoDTEP", because the rates are notified against the RITC code. Claiming both on one bill means two different filing habits on the same document, which is exactly where a claim gets dropped. The RODTEPY declaration sets out the RoDTEP side field by field.

What we could not establish

• Where the line falls on a specific levy. The instruments state the principle at levy level and stop there. No official guidance we found works through which levies are treated as already remitted by Drawback for RoDTEP purposes, so we are not going to publish a mapping. That is an advice question on your own inputs and your own scheme mix.
• The drawback rules as amended, and which All Industry Rates schedule is in force today. The Drawback Rules, 2017 are quoted here from Notification No. 88/2017-Customs (N.T.) as issued. The CBIC repository serves notifications as issued rather than as amended, so we are not characterising amendments made since. The All Industry Rates schedule is revised by notification from time to time and we are not naming a current one here, because the schedule that governs is the one in force on your export date. Read the notification in force rather than a copy of one.
• The full current text of Notification No. 76/2021-Customs (N.T.). We read the notification as issued. Parts of it were amended in September 2022, and the repository that serves it does not serve a consolidated as-amended version, so we have quoted only condition 2(1)(a), which we have no indication was among the amended provisions, and we are not characterising the rest of it here. The word Drawback does not appear in the notification's substantive text at all.

Checked against the instruments named on this page: the notification register and the notification PDFs themselves, not anyone’s copy of them.

Frequently asked questions

What is the difference between duty drawback and RoDTEP?

They refund different money. Rule 2(a) of the Customs and Central Excise Duties Drawback Rules, 2017 defines drawback as the rebate of duty on imported or excisable materials used in manufacturing the exported goods, expressly excluding integrated tax and compensation cess. RoDTEP remits duties, taxes and levies that are not exempted, remitted or credited under any other scheme. Drawback is paid to the exporter as an amount; RoDTEP creates a transferable duty credit in the electronic ledger.

Can I claim RoDTEP and Duty Drawback on the same shipping bill?

Yes. ICEGATE Advisory No. 01/2021 provides that shipping bills with a RoDTEP and or Drawback claim are routed through the Risk Management System and then move to their respective scroll queues, and the ICEGATE e-scrip advisory records that the RoDTEP claim was allowed in addition to Drawback.

What is the restriction on claiming both?

Condition 2(1)(a) of Notification No. 76/2021-Customs (N.T.) dated 23 September 2021 issues duty credit only in lieu of a duty, tax or levy that "is not exempted, remitted or credited under any other Scheme". The bar applies to the individual levy, not to the shipping bill, so two schemes may run over one export as long as neither remits the same levy the other has.

Can RoDTEP and RoSCTL be claimed together?

No. RoSCTL applies to the relevant apparel and made-up chapters in exclusion of RoDTEP for those chapters, so an item takes one or the other. Drawback is not treated this way.

Can a Drawback problem hold up a RoDTEP scroll?

Yes. ICEGATE Advisory No. 01/2021 provides that a suspension placed on an exporter or shipping bill for Drawback also applies for the purpose of scrolling out RoDTEP benefits.

Do I declare a schedule serial number for RoDTEP as I do for Drawback?

No. Advisory No. 01/2021 states that unlike Drawback there are no schedule based serial numbers for RoDTEP, because the rates are notified against the RITC code, so no separate code or serial number is declared.