The government has clarified that exporters can continue to avail full remission or rebate benefits under the RoDTEP (Remission of Duties and Taxes on Exported Products) and RoSCTL (Rebate of State and Central Taxes and Levies) schemes on the full Free on Board (FOB) value, without deducting agency commission and foreign bank charges—subject to specified limits.
The clarification comes following representations from the trade seeking parity with duty drawback provisions in cases where sale proceeds are partially realised.
According to the communication issued by the Ministry, the matter was examined in consultation with the Directorate General of Foreign Trade (DGFT) and the Ministry of Textiles. It reiterated that, in line with earlier circulars on duty drawback, deductions such as agency commission and foreign banking charges will not be reduced from the FOB value, provided they do not exceed 12.5% of the FOB value.
However, if such deductions—either individually or combined—exceed the 12.5% threshold, the excess amount will be deducted from the FOB value for the purpose of calculating benefits under RoDTEP and RoSCTL.
In a further relief to exporters, the government clarified the treatment of short realisation of export proceeds compensated through the Export Credit Guarantee Corporation (ECGC). Such compensation may be treated as deemed realisation of sale proceeds, ensuring that exporters do not lose benefits under the two schemes.
This is subject to certain conditions, including the Reserve Bank of India (RBI) writing off the requirement of realisation on merits, and the exporter furnishing a certificate from the concerned Indian foreign mission confirming non-recovery of proceeds.
The government has directed that suitable trade notices and standing orders be issued to ensure clarity and uniform implementation of the provisions across the trade and field formations.
The move is expected to provide much-needed clarity and support to exporters, particularly amid ongoing global trade uncertainties.
