Government Restores Tax Refund Scheme Worth Rs 18,233 Crore, But Stop-Start Leaves Exporters Unsettled

The government has restored benefits worth Rs 18,233 crore under the Remission of Duties and Taxes on Exported Products scheme for exports made by advance authorisation holders, export-oriented units, and units operating in special economic zones, in a boost for aluminium and mining players.

The RoDTEP scheme has been designed to reimburse exporters for embedded duties, taxes, and levies that are not otherwise refunded under any other existing scheme.

The move comes days after Federation of Indian Chambers of Commerce & Industry, Federation of Indian Mineral Industries and Aluminium Association of India had formally written demanding restoration of the said scheme.

However, the government has said benefits will apply for all eligible exports made from June 1 onwards. That is in conflict with the industry's demand of making this restoration effective from Feb. 7, given that the earlier scheme ended on Feb. 6.

The Federation of Indian Export Organisations welcomed the government's move, but also requested this restoration be effective from Feb. 7, 2025, so that there is no gap in RoDTEP coverage.

"A seamless transition would ensure stability and predictability for exporters and avoid any disruption in trade planning or pricing," FIEO President SC Ralhan said.

Ajay Srivastava, founder of think tank Global Trade Research Initiative, said the government’s stop-and-start approach to RoDTEP undermines the scheme’s purpose.

"Although RoDTEP is a WTO-compliant way to refund embedded duties paid by exporters, its repeated withdrawal for AA holders, EOUs, and SEZs creates serious uncertainty. Exporters struggle to price products or plan long-term deals when they cannot rely on steady refunds. While the reinstatement of benefits is welcome, it raises a bigger issue: why were they cut off mid-cycle at all?" he said.

As of March 31, 2025, total disbursements under the RoDTEP scheme have crossed Rs 57,976.78 crore. For FY26, the government has allocated Rs 18,233 crore under the scheme. The support will cover 10,780 HS lines for Domestic Tariff Area exports and 10,795 HS lines for AA/EOU/SEZ exports.