Govt set to extend input tax remission scheme for exporters beyond Sept 30
The RoDTEP scheme, announced in January 2021, refunds embedded duties and taxes such as VAT on fuel used in transportation, mandi tax and duty on electricity used during manufacturing of the exported items.
| Photo Credit:
VIPIN CHANDRAN
In what could provide confidence to Indian exporters grappling with an unpredictable global market, the government is set to extend the popular Remission of Duties and Taxes on Exported Products (RoDTEP) scheme beyond September 30, 2025 when it is scheduled to lapse, sources have said.
“The scheme will definitely be extended beyond September 30, 2025 to the main beneficiaries. It is usually extended for a limited period just to monitor the spend and ensure that the budgetary allocation for the scheme is not exceeded. We are comfortable as far as budgetary allocation for the ongoing fiscal is concerned,” a source told businessline.
There is no guarantee, however, that the benefits will also be extended to units in SEZs and EOUs and Advance Authorisation (AA) holders, the source added.
For FY26, the Budget for RoDTEP is ₹18,000 crore as opposed to ₹16,575 crore in the previous fiscal, the source pointed out.
“As exports of goods at the moment are not growing at a fast pace because of global uncertainties, one can expect that RoDTEP claims will not overshoot the allocation,” the source said.
The RoDTEP scheme, announced in January 2021, refunds embedded duties and taxes, such as VAT on fuel used in transportation, mandi tax and duty on electricity used during manufacturing of the exported items.
Sectors in the scheme
While most manufacturing sectors are included in the scheme, a few such as steel, pharmaceuticals and chemicals are excluded.
“Apart from the excluded sectors, all other sectors are likely to continue to be included when the scheme is extended beyond September 30. But extension for units in SEZs and EOUs is not certain,” the source said.
SEZ units and EOUs and AA holders got included in the RoDTEP scheme in March 2024. The scheme lapsed for them on December 31 2024 and was recently extended with retrospective effect till February 5 2025.
“It is unfair to treat SEZ exporters different from other exporters. The scheme tenure should be same for all. If there is a funding constraint then more sectors could be excluded but SEZs and EOUs should not be discriminated against,” a Delhi-based garments exporter pointed out
Exporters have also been demanding that instead of extending the scheme for just a few months, the government should consider extending it by five years for continuity and better decision making on prices.
In FY25, India’s goods exports were almost flat at $437.4 billion compared to $437.1 billion in the previous year. While geopolitical crisis and a global slowdown had made the going difficult for exporters, things have become even more predictable due to US President Donald Trump’s reciprocal tariff threats.
Published on April 29, 2025
