The Commerce Department is holding consultations with the Finance Ministry to secure a longer-term extension of two key export support schemes — the Remission of Duties and Taxes on Exported Products (RoDTEP) and the Rebate of State and Central Taxes and Levies (RoSCTL). The schemes’ latest three-month extensions are due to expire on December 31, 2026.
However, the Finance Ministry has yet to be convinced of the schemes’ effectiveness in boosting exports, according to sources.
The Commerce Department had earlier sought a five-year extension of both schemes before their previous validity ended on September 30, arguing that the remission of embedded taxes on exported goods should be treated as reimbursement rather than an export incentive. The proposal did not receive approval, prompting the department to renew its efforts to secure a longer extension.
The move assumes significance amid geopolitical uncertainties and disruptions affecting international trade, with exporters seeking policy stability and continued government support to remain competitive in global markets.
RoDTEP covers a wide range of exported products, subject to specified exclusions, and reimburses embedded Central, State and local duties, taxes and levies that are not refunded through other mechanisms. The scheme is considered particularly important for micro, small and medium enterprises (MSMEs), including exporters in labour-intensive sectors.
The remission rates vary across products and are linked to the eligible duties and taxes borne by exporters. By refunding these embedded costs, the scheme aims to prevent domestic taxes from being built into export prices, thereby improving the competitiveness of Indian goods in international markets.
RoSCTL operates on a similar principle but is specifically designed to support exports of apparel, garments and made-ups by rebating eligible State and Central taxes and levies.
A longer-term extension of both schemes would provide greater policy certainty to exporters and help them plan pricing, production and overseas market commitments. The outcome of the ongoing discussions between the Commerce and Finance ministries will determine whether the schemes receive an extension beyond December 31.