The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 20/2026-Customs dated April 10, 2026, clarifying the treatment of export incentives under the RoDTEP (Remission of Duties and Taxes on Exported Products) and RoSCTL (Rebate of State and Central Taxes and Levies) schemes.
The circular brings much-needed relief by addressing scenarios where exporters face short realisation of export proceeds, a common issue in global trade due to payment defaults or delays.
Key Clarification: Benefits Still Available on FOB Value
CBIC has clarified that exporters can continue to claim benefits under RoDTEP and RoSCTL based on the Free on Board (FOB) value, even if the actual realisation is lower.
However, this is subject to a crucial condition:
- Deductions such as agency commission and foreign bank charges are permitted
- These deductions must not exceed 12.5% of the FOB value
This aligns the treatment with earlier provisions under duty drawback rules, ensuring consistency across export incentive schemes.
ECGC Compensation to Be Treated as Realisation
One of the most impactful aspects of the circular is the treatment of compensation received from the Export Credit Guarantee Corporation (ECGC).
CBIC has clarified:
- Compensation received from ECGC for short realisation can be treated as realised export proceeds
- Exporters may still retain RoDTEP and RoSCTL benefits, provided:
- The Reserve Bank of India (RBI) writes off the unrealised amount
- A certificate from ECGC or the relevant authority confirms non-recovery of proceeds
This is a major relief for exporters dealing with buyer defaults.
Alignment with Existing Legal Framework
The clarification draws support from:
- Customs and Central Excise Drawback Rules, 2017
- Foreign Trade Policy, 2023
- Earlier CBIC circulars (2003 and 2019)
By aligning RoDTEP and RoSCTL provisions with established drawback norms, CBIC ensures regulatory consistency and reduces ambiguity.
What This Means for Exporters
This circular is expected to:
- Reduce disputes related to export incentive claims
- Provide certainty in cases of partial or delayed payments
- Strengthen confidence among exporters in volatile international markets
Exporters are advised to maintain proper documentation, especially in cases involving ECGC claims and RBI approvals.
Conclusion
CBIC has also indicated that Trade Notices and Standing Orders may be issued for further guidance, ensuring smooth implementation of these provisions.
Official copy of the Circular is as follows
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