Budget 2025: Export Tax Remission Schemes to Get 10% Boost

By siliconindia  |  Wednesday, 22 January 2025, 10:01:54 AM IST

Budget 2025: Export Tax Remission Schemes to Get 10% Boost
The Finance Ministry is likely to increase the allocation for two key tax remission schemes for exporters the Remission of Duties and Taxes on Exported Products (RoDTEP) and the Rebate of State and Central Taxes and Levies (RoSCTL) by 10% in the Budget 2025-26. This is aimed at supporting exporters in countering global economic challenges, sources familiar with the matter said.
In the July 2024 budget, the government had allocated Rs 16,575 crore for the RoDTEP scheme and Rs 9,246 crore for the RoSCTL, specifically for textile and garment exporters. However, the commerce department has sought additional funds of Rs 1,800 crore for RoDTEP to address the rising demand for tax remissions, a proposal currently under review by the expenditure department.
These schemes refund state and central taxes levied on inputs used in production to ensure exports remain zero-rated in accordance with global trade norms. The rates of refund under the RoDTEP scheme vary between 0.3% and 4.3% of the freight-on-board value, depending on the product.
Discussions are also underway to extend RoDTEP benefits to companies in special economic zones (SEZs) and export-oriented units, as well as to prolong the interest equalisation scheme beyond its December 2024 deadline. Export organizations have urged the government to provide sustained support to capitalize on emerging opportunities, especially in the wake of a potential tariff war between the US and China during Donald Trump's presidency.
During a pre-budget meeting with Finance Minister Nirmala Sitharaman on December 26, export bodies stressed the need for strong support. FIEO President Ashwini Kumar emphasized exportable opportunities worth $25 billion in electronics, auto parts, chemicals, and apparel through expected tariff conflict.
India's merchandise exports rose 1.6 per cent year on year to $322 billion until December this fiscal. The World Trade Organization had forecast a slight pickup in global trade volume growth to 3 per cent in 2025 from 2.7 per cent in 2024, subject to the easing of geopolitical tensions in West Asia.
The enhanced allocations in the upcoming budget are seen as a critical step to ensure Indian exporters remain competitive amid global uncertainties and leverage new trade opportunities.

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