Duty Exemption on Inputs

Advance Authorisation Scheme

If you’re importing raw materials that go directly into what you export, this is likely your starting point. The Advance Authorisation Scheme lets you import those inputs — including fuel, oil, and catalysts consumed in production — completely free of duty, as long as they’re physically incorporated into the finished export product.

The quantity you’re allowed to import is governed by Standard Input Output Norms (SION), a self-declaration, or ratification by the Norms Committee. It’s issued on a pre-import, “actual-user” basis, meaning the inputs have to actually go into your exports — not get sold off separately.

What you get:

• Exemption from Basic Customs Duty, Additional Customs Duty, IGST & Compensation Cess (where notified), plus Anti-dumping, Countervailing and Safeguard duties
• Freed-up working capital, since there’s no upfront duty outflow on your raw materials
• The option to source inputs domestically instead, using an Advance Release Order (ARO) or Invalidation Letter — which also gives your domestic supplier deemed-export benefits

Who qualifies:

Manufacturer exporters, or merchant exporters working with a supporting manufacturer. It covers physical exports (including supplies to SEZs), intermediate supplies, specified deemed-export supplies, and even supply of “stores” on board foreign-going vessels or aircraft where an SION exists.

What’s required:

• A minimum value addition of 15% (higher for some sectors)
• Meeting your export obligation within 18 months of issue (extendable per the Handbook of Procedures)
• A 12-month validity window for imports, with proper input–output accounts maintained throughout
• Closing out the authorisation with an Export Obligation Discharge Certificate (EODC)

Duty Free Import Authorisation (DFIA)

Think of DFIA as Advance Authorisation’s more flexible sibling — it works on the same principle, but with one key difference: it’s granted after your exports are completed, not before. And unlike Advance Authorisation, it’s transferable.

What you get:

• Exemption from Basic Customs Duty on the notified inputs
• The ability to sell or pass on an unused entitlement, since the authorisation is transferable
• A simpler route for standard, well-defined export products

Who qualifies:

Manufacturer and merchant exporters — but only for products where an SION has actually been notified. Minimum CIF value and other conditions apply.

What’s required:

A minimum value addition of 20%, and exports must be completed against the authorisation before it can be transferred. It becomes freely transferable once your export obligation is met and the EODC is granted.

Capital Goods at Zero Duty

Export Promotion Capital Goods (EPCG) Scheme

If your bottleneck isn’t raw materials but machinery, the EPCG Scheme is built for you. It allows exporters to import capital goods — for pre-production, production, and post-production — at zero customs duty. The underlying goal is straightforward: modernise Indian manufacturing and make it globally competitive.

You can also source capital goods domestically under this scheme, in which case your domestic supplier receives deemed-export benefits — a nice way to support “Make in India” without giving up the duty concession.

What you get:

• 0% customs duty on imported capital goods, with IGST exemption where notified
• A significantly lower cost of technology upgrades and capacity expansion

Who qualifies:

Manufacturer exporters, merchant exporters tied to a supporting manufacturer, and service providers who export services.

What’s required:

• An Export Obligation equal to 6 times the duty saved, to be fulfilled over 6 years from the date of authorisation
• Maintaining your average export obligation from the previous 3 years, on top of this specific EO
• Installing the capital goods and submitting an installation certificate
• Note: reduced export obligations are available in some cases — for example, domestic sourcing or green technology

Getting Back the Taxes Hidden in Your Export Costs

RoDTEP (Remission of Duties and Taxes on Exported Products)

Every exporter absorbs taxes that never show up on an invoice — fuel VAT, electricity duty, mandi tax. RoDTEP exists specifically to refund those embedded costs that no other scheme touches. It’s WTO-compliant, has been live since 1 January 2021, and is jointly administered by DGFT and Customs.

What you get:

• A rebate calculated as a percentage of FOB value — product-wise rates broadly range from ~0.3% to 4.3%, per Appendix 4R
• A transferable electronic scrip credited to your customs ledger, which you can use to pay Customs Duty or simply sell

Who qualifies:

All exporters, including MSMEs and merchant exporters — though some products and categories are specifically excluded.

What’s required:

Declaring your intent to claim in the shipping bill at the time of export, and realising your export proceeds. The e-scrip lands in your ledger after export, and the same tax can’t be claimed twice.

RoSCTL (Rebate of State and Central Taxes and Levies)

If you’re in the apparel or textile business, this one’s for you specifically. RoSCTL is a Ministry of Textiles scheme that rebates state and central taxes on exports of garments/apparel (Chapters 61 & 62) and made-ups (Chapter 63) that aren’t already covered by GST refunds or RoDTEP.

What you get:

• A rebate as a percentage of FOB value, at notified rates
• Transferable duty-credit scrips usable to pay Basic Customs Duty
• A meaningful edge in keeping Indian textile and apparel exports price-competitive

Who qualifies:

Exporters of apparel/garments and made-ups under Chapters 61, 62 and 63, holding a valid IEC. If your product falls outside these chapters, you’d use RoDTEP instead.

What’s required:

Declaring your RoSCTL claim in the shipping bill and realising export proceeds. And to be clear — the same taxes can’t also be claimed under RoDTEP or duty drawback.

Recognition and Deemed Exports

Status Holder

Consistent export performance earns you more than a pat on the back — DGFT recognises it formally, in five tiers ranging from One to Five Star Export House. Your rank is based on cumulative FOB/FOR export value across the current year plus the three preceding financial years.

Thresholds as per FTP 2023, based on FOB/FOR value over the current plus three preceding years. MSMEs and certain categories get double weightage.

Here’s the part most exporters don’t realise: in most cases, there’s no application to file. Certificates (e-SHC) are now generated automatically from official DGCI&S export data.

What you get:

• The ability to self-certify goods as “originating in India” (for manufacturer status holders) and self-declare for faster clearances
• Exemption from furnishing bank guarantees and from compulsory bank negotiation of documents
• Priority customs handling and priority in DGFT schemes and approvals
• Permission to establish export warehouses
• Easier access to credit and other incentives

Who qualifies:

Any IEC-holding exporter that meets the export-value threshold for a tier, with double weightage for MSMEs, ISO/BIS-certified units, and units in specified regions.

Worth knowing:

Status is time-bound and renewable, based on continued compliance with the FTP — and some benefits, like self-certification of origin, apply only to manufacturer status holders.

Deemed Exports

Not every export benefit requires goods to physically leave India. Deemed Exports covers transactions where goods manufactured in India are supplied within the country — think supplies to EOUs, projects under international competitive bidding, or to Advance Authorisation/EPCG holders — with payment received in Indian rupees or free foreign exchange.

What you get:

• Refund of GST
• Deemed Export Drawback and brand-rate fixation
• Access to Advance Authorisation/DFIA for the inputs used in these supplies

Who qualifies:

Suppliers (and in some cases recipients) of goods falling under the categories specified in Para 7.02 of FTP 2023. Both parties need a valid IEC, and the goods must be manufactured in India.

Not Sure Which Scheme Applies to You? Start Here.

“I import raw materials to make my exports.”

→ Advance Authorisation — or DFIA if you’re dealing with standard, SION-notified products and want the flexibility of transferability.

“I need to buy machinery or equipment.”

→ EPCG — import capital goods at zero duty and repay through an export obligation over time.

“I just want to recover taxes hidden in my export costs.”

→ RoDTEP for most goods; RoSCTL if you’re exporting apparel, garments, or made-ups.

“I supply to EOUs or large projects within India.”

→ Deemed Exports — and as your volumes grow, keep an eye on Status Holder recognition.

Turn Policy Into Working Capital

None of these schemes help if they stay theoretical. Knowing which one applies to your business — and filing it correctly — is where the real savings happen.

For further reference: dgft.gov.in · Foreign Trade Policy 2023 & Handbook of Procedures · your jurisdictional DGFT Regional Authority

Disclaimer: Rates, thresholds, and timelines mentioned above are indicative under FTP 2023. Always verify current norms on dgft.gov.in before filing a claim.

How ProIndiaClub Can Help

Navigating DGFT schemes on your own is possible — but it’s rarely the best use of an exporter’s time. Here’s where we come in:

• Scheme Application & Licensing: End-to-end filing of Advance Authorisation, EPCG, DFIA, RoDTEP and RoSCTL applications, from registration through to EODC and closure.
• Scrip Trading — Buy & Sell: Facilitating the sale and purchase of transferable RoDTEP, RoSCTL, and other duty-credit scrips at the best available market value.
• DGFT Advisory & Consultancy: Guidance on Foreign Trade Policy matters, including scheme selection, eligibility, and interpretation tailored to your business.
• IEC & Compliance Support: IEC registration, DGFT portal management, export-obligation monitoring, and up-to-date record keeping.
• Status Holder & Representation: Status Holder certification, renewals, and representation before DGFT and Customs authorities.

Beyond DGFT: Other Export & Import Services We Offer

• MOOWR Licence — Duty Deferment: Assistance obtaining a licence under the MOOWR scheme, enabling deferment of customs duty on imported inputs and capital goods.
• Freight Subsidy Claims: Support in claiming freight subsidies available under applicable State Government export-incentive schemes.
• DGFT & Customs Notice Replies: Preparation of replies and submissions to notices issued by DGFT and Customs authorities.
• Representation Before DGFT: Representing your case before the DGFT Committee, including Policy Relaxation and related committees.
• Export Debt Recovery: Assistance recovering outstanding dues and delayed payments arising from international trade transactions.