Duty Drawback vs RoDTEP: Can You Claim Both and Which Pays More?

What Duty Drawback Covers

Duty Drawback is a refund of customs duties and central excise duties paid on imported or domestically procured inputs that go into the manufacture of exported goods. The legal basis is Section 74 and Section 75 of the Customs Act, 1962. Section 74 covers re-export of imported goods (used or unused), while Section 75 covers goods manufactured in India using duty-paid inputs and then exported.

The refund comes in two flavours:

• All-Industry Rate (AIR). A standard rate published annually by the government for each tariff item, based on average input consumption norms across the industry. Most exporters use AIR because it requires no company-specific application. The rates are notified every year, typically in January, via the Drawback Schedule.
• Brand Rate. A company-specific rate calculated from your actual input usage and the duties you have paid. You apply to your jurisdictional customs commissioner with invoices, duty payment proof, and input-output declarations. Brand Rate is almost always higher than AIR and is worth the effort when your input duty incidence exceeds the AIR significantly. For instance, when you import high-grade stainless steel or specialty chemicals that attract higher duties than the industry average.

What RoDTEP Covers

RoDTEP (Remission of Duties and Taxes on Exported Products) refunds embedded taxes and levies that are not covered by Duty Drawback or by GST input tax credit. These are taxes baked into your cost structure that you cannot recover through any other mechanism.

Specifically, RoDTEP reimburses:

• State VAT / CST on fuel used in manufacturing and transportation (diesel, furnace oil, coal).
• Mandi tax (market fee) on procurement of agricultural raw materials.
• Electricity duty levied by state governments on power consumed during manufacturing.
• Stamp duty on export-related documentation and contracts.
• CGST/SGST on items where input tax credit is blocked under Section 17(5) of the CGST Act. For example, GST paid on construction of factory buildings, company vehicles, or food and beverages for employees.
• Coal cess and other central cesses not subsumed under GST.

RoDTEP rates range from 0.3% to 4.3% of FOB value, depending on the HS code. The benefit is issued as transferable duty credit scrips through ICEGATE, which can be used to pay customs duties on future imports or sold to other importers on the open market. Use our RoDTEP calculator to find your rate.

Can You Claim Both? Yes.

This is the most common question exporters ask, and the answer is straightforward: yes, you can claim Duty Drawback and RoDTEP simultaneously on the same export shipment. There is no conflict because the two schemes refund entirely different cost elements.

Why there is no overlap

• Drawback refunds customs duty + central excise on inputs (imported or domestic) used in exported goods.
• RoDTEP refunds embedded taxes that are explicitly excluded from the drawback calculation. State levies, electricity duty, blocked ITC items.
• No double-dipping. The RoDTEP committee designed the rates after excluding all items already covered by drawback and GST ITC.

To claim both, you must select the appropriate scheme codes on your shipping bill at the time of filing via ICEGATE. The drawback claim is processed by your port customs, while the RoDTEP scrip is generated by DGFT. Both processes run independently and in parallel.

Side-by-Side Comparison

Here are the eight parameters that matter most when comparing the two schemes:

Which Pays More?

There is no universal answer. It depends entirely on your product, your input mix, and your manufacturing process.

High-duty-input products (stainless steel utensils, speciality chemicals, electronic assemblies, auto components) tend to get significantly more from Duty Drawback. The customs duties on imported raw materials (steel coils at 7.5%, speciality chemicals at 5-10%, electronic components at 5-15%) translate into drawback rates of 3-7% of FOB. For these products, drawback is often 2-3x the RoDTEP benefit.

Low-imported-input products (garments made from domestic cotton, handicrafts, processed food, leather goods using domestic hides) get relatively less from drawback because their input duties are low. But their embedded state taxes (electricity duty for power looms, mandi tax on cotton or agricultural inputs, state VAT on diesel for logistics) are significant. For these, RoDTEP delivers the bigger refund.

Rate Examples: Drawback + RoDTEP by Product

These are indicative rates for FY 2026-27 based on the current Drawback Schedule and RoDTEP rate table. Actual rates depend on your specific HS code and tariff item.

Notice how the ratio flips: steel exporters get 80% of their benefit from drawback and 20% from RoDTEP, while garment exporters get roughly 30% from drawback and 70% from RoDTEP. Both matter, but the dominant scheme changes based on your input profile.

Common Mistakes That Cost Exporters Money

We see the same errors repeatedly in shipping bill data. Each one either delays or kills your claim:

Not marking the shipping bill for both schemes

The most expensive mistake. If you forget to tick the RoDTEP scheme code or the drawback scheme code on the shipping bill, you forfeit that claim for the entire consignment. The system does not auto-apply benefits. You can attempt a shipping bill amendment , but it takes months and is not always approved.

Using the wrong scheme code

Drawback and RoDTEP have specific scheme codes that must match your product and the type of drawback being claimed (AIR vs Brand Rate). Using the wrong code causes a query from customs, delaying payment by weeks. Your customs broker should verify codes against the current Drawback Schedule and RoDTEP notification before filing.

Not claiming Brand Rate when AIR is low

Many exporters default to AIR even when their actual duty incidence is 2-3x higher. If you import raw materials with duty rates above 5% and the AIR for your export product is below 2%, you are leaving money on the table. The Brand Rate application process takes effort, but the payoff is often substantial. We have seen exporters go from 1.5% AIR to 5.8% Brand Rate on the same product.

Mismatched HS codes between shipping bill and drawback schedule

The drawback tariff item number is not always the same as the HS code on your shipping bill. A mismatch triggers a query and blocks automatic processing. Cross-reference your shipping bill HS code with the corresponding drawback tariff item in the current schedule before filing.

Ignoring the RoDTEP per-unit cap

RoDTEP rates have a per-unit cap in the schedule. If your FOB value per unit is very high (e.g. Machinery), the percentage benefit may sound attractive but hits the rupee cap quickly. Check both the percentage rate and the per-unit maximum for your HS code to set accurate expectations.

RoSCTL for Textiles: A Separate Scheme

If you export apparel and made-ups falling under HS Chapters 61, 62, and 63, you do not claim RoDTEP. Instead, you claim under RoSCTL (Rebate of State and Central Taxes and Levies) , which was introduced specifically for the textile sector and replaces both RoDTEP and the old MEIS scheme for these chapters.

RoSCTL rates are generally more generous than RoDTEP rates for the same products because the textile value chain has uniquely high embedded state taxes. Power loom electricity duty, cotton mandi tax, state-level cotton development cess, and fuel surcharges on cotton transportation.

Key points on RoSCTL

• Applies to Chapters 61-63 only. Apparel (knitted and woven), made-up textile articles, and worn clothing.
• Can be claimed alongside Duty Drawback. Same stacking principle as RoDTEP. Drawback covers input duties, RoSCTL covers embedded state/central taxes.
• Rates: 2.5-6.05% of FOB depending on the product, significantly higher than the 0.5-4.3% typical under RoDTEP for non-textile products.
• Claimed via ICEGATE. Same mechanism as RoDTEP. Select the RoSCTL scheme code on the shipping bill. Scrips are issued as transferable duty credits.

Frequently Asked Questions

Can I claim both Duty Drawback and RoDTEP on the same export shipment?

Yes. They cover different cost elements and can be claimed simultaneously on the same shipping bill. Drawback refunds customs duties and excise on inputs. RoDTEP refunds embedded state and central taxes not covered by drawback or GST ITC. Fuel VAT, mandi tax, electricity duty, and stamp duty. You must select both scheme codes on the shipping bill at the time of filing.

Which pays more. Duty Drawback or RoDTEP?

It depends on your product. High-duty-input products (stainless steel, chemicals, electronics) get more from Drawback because the customs duties refunded are substantial. Rates can reach 4-7% of FOB. Low-input products (garments, handicrafts, processed food) benefit more from RoDTEP because embedded state taxes form a larger share of their cost. For most exporters, combining both yields 3-8% of FOB value.

What is the difference between All-Industry Rate and Brand Rate?

All-Industry Rate (AIR) is the standard drawback rate for each tariff item, based on average input consumption across the industry. Brand Rate is company-specific, calculated from your actual inputs and duties paid. You apply to the customs commissioner with proof. Brand Rate is typically higher and worth pursuing when your input duty incidence exceeds the AIR by a meaningful margin. Read our Duty Drawback guide for the full Brand Rate application process.

Update history

• 2026-08-07 First published.