Exporters Likely to See Key Tax Remission Scheme Extended

Indian exporters may soon receive a significant boost to navigate the unpredictable global trade landscape as the government is poised to prolong a crucial scheme that remits embedded duties and taxes on exported products. The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, currently slated to conclude on September 30, 2025, is expected to be extended, offering continued support to a majority of outbound businesses. Sources indicate that the extension is intended for the scheme's principal beneficiaries and might be granted for a defined duration. This approach allows authorities to effectively monitor expenditure and ensure adherence to the allocated budget. The budgetary provision for the RoDTEP scheme is set to increase to ₹18,000 crore in the fiscal year 2026, up from ₹16,575 crore in the preceding fiscal year. Officials suggest that, given the current pace of goods export growth amidst global uncertainties, the claims under the scheme are anticipated to remain within the allocated funds. However, the continuation of benefits for units operating within Special Economic Zones (SEZs), Export Oriented Units (EOUs), and holders of Advance Authorisations remains less certain. These categories were brought under the ambit of the RoDTEP scheme in March 2024, with their eligibility recently extended retrospectively until February 5, 2025, after initially lapsing at the end of 2024. The lack of long-term clarity for these exporting entities has been a point of concern within the trade community, with some arguing for equitable treatment across all types of exporters. The RoDTEP scheme, introduced in January 2021, plays a vital role in refunding various central, state, and local levies that are not rebated under other mechanisms. These include taxes like VAT on fuel used in transportation, mandi taxes, and electricity duties incurred during the manufacturing process of goods destined for export markets. While the scheme encompasses most manufacturing sectors, certain key industries such as steel, pharmaceuticals, and chemicals are presently excluded from receiving these benefits. The expectation is that the majority of currently covered sectors will continue to be eligible under the extended scheme, with the uncertainty primarily centred on the inclusion of SEZ and EOU units. The export sector has also voiced a desire for a more long-term policy, advocating for a five-year extension of the scheme. This, they contend, would provide greater stability and predictability, facilitating better pricing strategies and long-term business planning in a challenging global environment. India's goods exports in the fiscal year 2025 remained relatively flat compared to the previous year, totalling approximately $437.4 billion. Exporters have been navigating difficulties arising from geopolitical tensions and a global economic slowdown, with added unpredictability stemming from potential shifts in trade policies in major markets. The extension of the RoDTEP scheme is seen as a crucial measure to provide a level of confidence and support to Indian businesses as they contend with these external headwinds.