Duty credit scrips: creation, validity, and transfer

A duty credit scrip is a credit balance in the customs system, created against exports already made and spendable against customs duty on imports still to come. The Electronic Duty Credit Ledger Regulations, 2021 were notified vide Notification No. 75/2021-Customs (N.T.) dated 23-09-2021, G.S.R. 654(E), in exercise of the powers conferred by section 51B read with section 157 of the Customs Act, 1962. Regulation 2(f) defines an e-scrip as the scrip created in the ledger for duty credit as mentioned in Explanation 1 of section 28AAA of the Act.

Which schemes reach the ledger?

Two, and only two, under these regulations. Regulation 2(i) defines Scheme as the Scheme for Remission of Duties and Taxes on Exported Products, RoDTEP, or the Scheme for Rebate of State and Central Taxes and Levies, RoSCTL. Regulation 3(3) provides that separate scrolls will be generated for each Scheme, so a business claiming both carries two distinct credit streams through the same ledger rather than a merged balance.

That definition is also the boundary of the mechanism described here. Duty drawback does not arrive as a scrip: the CBIC taxpayer services brochure on duty drawback records that it is disbursed directly into the exporter's bank account, which is why duty drawback and the schemes on this ledger behave completely differently in a cash forecast even though both are described as remission.

How does a claim become a credit?

Through a declaration, then a manifest, then a scroll. Regulation 2(b) defines a claim as a claim of duty credit under the Schemes made by an exporter in the shipping bill or bill of export by providing the appropriate declaration at the item level in the customs automated system. Regulation 3(1) provides that a shipping bill or bill of export presented under section 50 of the Act on or after 01-01-2021 and having a claim shall be processed in the customs automated system, including on the basis of risk evaluation through appropriate selection criteria.

Regulation 3(2) provides that the claim shall be allowed as per the conditions and restrictions notified for the Scheme after the filing of the export manifest or export report, and regulation 3(3) that once allowed, a scroll for duty credit will be generated by the proper officer. Regulation 3(4) provides that the scroll details, including the details of the shipping bill or bill of export, the duty credit allowed and the date of generation of the scroll, shall be visible in the customs automated system to the exporter. Regulation 2(h) defines the proper officer for this purpose as a Deputy Commissioner or Assistant Commissioner of Customs.

How is a scrip created from a scroll?

By exercising an option, or by not exercising it. Regulation 4(1) provides that the exporter shall have the option to combine the duty credits under a particular Scheme allowed in one or more shipping bills or bills of export, and to carry them forward to create an e-scrip for that Scheme in the ledger, customs station-wise according to the customs station of export, within a period of one year from the date of generation of the scroll.

The proviso to the same regulation is the part most readers miss. It provides that if the exporter does not exercise that option within the said period of one year, the duty credit in each scroll will be combined customs station-wise for each Scheme and will be automatically created by the customs automated system as a single e-scrip for that Scheme, for each customs station, in the exporter's ledger. Regulation 4(2) provides that each e-scrip has a unique identification number and date of creation, and that all transactions in the ledger are carried out using that number and date.

Where is a scrip registered?

Nowhere you have to apply to. Regulation 5(1) provides that the customs station of export shall be the customs station of registration for an e-scrip, and regulation 5(2) that registration shall be automatic and that a separate application shall not be required to be filed. This is why regulation 4(1) makes creation customs station-wise: a business exporting through three ports carries at least three separate scrips per scheme, because the station of export determines the station of registration and the scrips cannot be pooled across them.

For an exporter with a spread of gateway ports, that is a practical constraint rather than a formality. It sets the smallest useful unit of credit, and it means the answer to how many scrips a book carries is a function of the port map rather than of the number of shipments. The shipping bill, field by field covers where the port of export is fixed in the first place.

What can the credit actually be spent on?

One thing. Regulation 6(1) provides that the duty credit available in the e-scrip in the ledger shall be used for payment of duties of Customs specified in the First Schedule to the Customs Tariff Act, 1975. Paragraph 4.56 of the Foreign Trade Policy 2023 says the same in plainer words for RoDTEP, recording that the scrips would be used only for payment of duty of Customs leviable under the First Schedule to the Customs Tariff Act, 1975, namely basic customs duty.

That single sentence decides who a scrip is worth full value to. It cannot be applied to integrated tax, to compensation cess, or to the social welfare surcharge, so a holder whose import bill is mostly integrated tax has far less use for it than the face value suggests. Landed cost at your gate separates the duty fold into its components, which is the arithmetic that tells you which part of your own import bill a scrip can reach.

How long does a scrip last?

As notified, one year, and this is the figure most worth checking against the version in force. Regulation 6(2), as notified on 23-09-2021, provides that the e-scrip shall be valid for a period of one year from the date of its creation in the ledger and that any duty credit remaining unutilised at the end of that period shall lapse. Regulation 6(3) provides that duty credit that has lapsed shall not be re-generated.

An amendment substituting two years for one year in regulations 6(2) and 7(3) has been widely reported, and we could not confirm the amending instrument on an official source at the time of writing. Treat the validity period as the single fact on this page to re-verify against the regulation in force on your own creation date. Either way the shape of the risk is the same, and it compounds with the one year creation window in regulation 4(1): both are covered from the money side in the two clocks on every RoDTEP claim.

How does a transfer work, and what can undo a scrip?

Whole, once, to an Importer-exporter Code holder. Regulation 7(1) provides that transfer of duty credit in an e-scrip shall be allowed within the customs automated system from the ledger of a person to the ledger of another person who is a holder of an Importer-exporter Code Number issued in terms of the Foreign Trade (Development and Regulation) Act, 1992. Regulation 7(2) provides that the credit shall be transferred at a time for the entire amount in the e-scrip and that transfer in part shall not be permitted, and regulation 7(3) that the period of validity shall not change on account of transfer.

Regulation 7(3) is the sentence a buyer needs to read. A transferred scrip does not restart its clock, so what is being bought is the residual life as much as the balance. Regulation 8 sets out the other end of the risk: where a person contravenes any provision of the Act or any other law in force, or the rules or regulations made under them, in relation to the exports to which the duty credit relates or in relation to the e-scrip, the duty credit or e-scrip may be suspended or cancelled in the ledger in the manner notified by the Central Government under section 51B of the Act.

Where to go from here

The ledger is the common floor under every remission scheme, so the pages above it are about which credit arrives, not about how it behaves once it does.

• The two windows in rupees. The two clocks on every RoDTEP claim covers the creation window and the validity window and what lapses between them.
• Reading the rate that produced the credit. RoDTEP rates and the change timeline shows why the rate belongs to a tariff item on a date.
• The other scheme on the same ledger. RoSCTL, the textiles rebate covers the apparel and made-ups scheme and where RoDTEP stops.
• The remission that never becomes a scrip. Duty drawback is paid into a bank account instead, which is why it behaves differently in a forecast.
• Selling a credit rather than holding it. ScripX is a separate Eximfiles product that deals in duty credit scrips. It is not part of Purser and nothing on this page depends on it.

Purser Outbound holds the scroll date and the creation date on the shipment record, so the windows in regulation 4(1) and regulation 6(2) are computed from the record rather than kept in a spreadsheet, and the port of export that fixed the station of registration is the same one the shipping bill carried. Purser never submits to a government portal, and it never sends an outbound message without a recorded human approval event. Whether to use a scrip, hold it or transfer it is a commercial decision and it stays yours.

Frequently asked questions

What is a duty credit scrip?

A credit balance in the customs system created against exports already made. Regulation 2(f) of the Electronic Duty Credit Ledger Regulations, 2021 defines an e-scrip as the scrip created in the ledger for duty credit as mentioned in Explanation 1 of section 28AAA of the Customs Act, 1962. The regulations were notified vide Notification No. 75/2021-Customs (N.T.) dated 23-09-2021 in exercise of the powers conferred by section 51B read with section 157 of that Act, and regulation 2(i) limits the schemes covered to RoDTEP and RoSCTL.

How long does an exporter have to create a scrip from a scroll?

One year. Regulation 4(1) of the Electronic Duty Credit Ledger Regulations, 2021 gives the exporter the option to combine duty credits and create an e-scrip customs station-wise within a period of one year from the date of generation of the scroll. The proviso to that regulation provides that if the option is not exercised within that year, the credit in each scroll is combined customs station-wise for each Scheme and automatically created by the customs automated system as a single e-scrip in the exporter's ledger.

What can a duty credit scrip be used to pay?

Duties of Customs specified in the First Schedule to the Customs Tariff Act, 1975, under regulation 6(1) of the Electronic Duty Credit Ledger Regulations, 2021. Paragraph 4.56 of the Foreign Trade Policy 2023 states the same restriction for RoDTEP in plainer terms, recording that the scrips would be used only for payment of duty of Customs leviable under the First Schedule, namely basic customs duty. It cannot be applied to integrated tax, compensation cess or the social welfare surcharge.

Can a duty credit scrip be transferred in part?

No. Regulation 7(2) of the Electronic Duty Credit Ledger Regulations, 2021 provides that the duty credit available in an e-scrip shall be transferred at a time for the entire amount in that e-scrip to another person, and that transfer of the duty credit in part shall not be permitted. Regulation 7(1) requires the transferee to be a holder of an Importer-exporter Code Number issued under the Foreign Trade (Development and Regulation) Act, 1992, and regulation 7(3) provides that the validity period does not change on account of the transfer.

Can a duty credit scrip be cancelled after it has been issued?

Yes. Regulation 8 of the Electronic Duty Credit Ledger Regulations, 2021 provides that where a person contravenes any provision of the Customs Act, 1962 or any other law for the time being in force, or the rules or regulations made under them, in relation to the exports to which the duty credit relates or in relation to the e-scrip, the duty credit or e-scrip may be suspended or cancelled in the ledger in the manner notified by the Central Government under section 51B of the Act.