RoDTEP / Duty Drawback Benefits for Exports to Nepal & Bhutan Should be Governed by FTP or Respective Customs Notifications in Case of Inconsistency?

[Dipika Shetye]

I seek views on an apparent inconsistency between the FTP provisions and the specific Customs NN governing RoDTEP and Duty Drawback for exports to Nepal and Bhutan.

As per the recent FTP Amendment in Para 2.52 and 2.53 of the Foreign Trade Policy (FTP) 2023 - 30/2026-27 - Foreign Trade Policy, the provisions relating to Nepal and Bhutan have been revised. However, I could not find any corresponding amendment in:

• Duty Drawback Notification Goods specified if exported under claim for drawback are likely to be smuggled back into India - Supersession Notification No. 49-Customs (G.S.R. 225), dated the 1st February, 1963 - G.S.R. 1318 - Customs -Tariff
• RoDTEP Notification Manner to issue duty credit for goods exported under the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) Notified. - 76/2021 - Customs - Non Tariff

Both of the above notifications contain their own specific conditions for claiming benefits on exports to Nepal and Bhutan.

My query is:

In case of exports to Nepal and Bhutan, should eligibility for Duty Drawback and RoDTEP be determined strictly as per the respective Customs notifications, or can reliance be placed on the amended FTP provisions where the two appear to be inconsistent?

AI Summary

Export incentive eligibility for Nepal and Bhutan remains subject to specific Customs conditions despite INR settlement under the FTP.
Eligibility for Duty Drawback and RoDTEP on exports to Nepal and Bhutan is distinguished from the permissibility of INR settlement under the FTP and foreign-exchange framework. Specific Customs notification conditions are treated as independently governing fiscal-benefit eligibility. Drawback conditions continue unless amended under customs law. RoDTEP conditions, including realisation against an irrevocable letter of credit in freely convertible currency for Nepal and Bhutan exports, are likewise treated as continuing unless correspondingly amended. Harmonisation with amended FTP provisions may be arguable but does not automatically displace Customs conditions.