The government is working to fix a digital mismatch that has left exporters in limbo. It plans to sync product IDs or HSN codes used by customs with the official lists issued by the Directorate General of Foreign Trade (DGFT), helping unlock tax refunds and other benefits under certain incentive plans, including the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.
Due to mismatches, some exporters may be unable to claim benefits immediately and may need to undergo additional verification, potentially leading to delays and a temporary blockage of funds, according to people familiar with the development.
“The ICEGATE portal (used by exporters and importers) is being fixed to ensure that HSN codes in government policies (such as those of DGFT) match with what is available on the portal,” one of the people said, requesting anonymity.
The issue is more pronounced in sectors such as gems and jewellery and textiles, where product classifications can be more nuanced, the people said.
“Those benefits can’t be availed if the HSN code available on the ICEGATE portal doesn’t match what the DGFT policy provides. Exporters then have to wait for verification, which leads to delays in availing the scheme’s benefits,” the first person cited above said.
The HSN (Harmonised System of Nomenclature) codes are internationally standardised numerical codes used to classify traded goods, forming the backbone of customs tariffs and trade data.
In India, both Customs (through ICEGATE) and the Directorate General of Foreign Trade use HSN codes, but differences can arise because DGFT may describe products differently for policy purposes, while Customs follows stricter tariff and system-based classifications.
“The nomenclature should be standardised based on HSN codes to eliminate such discrepancies and prevent unnecessary harassment of exporters,” a second person said.
For instance, the RoDTEP scheme refunds certain taxes and duties that exporters incur but cannot otherwise claim back, helping make Indian goods more competitive globally. However, the benefits are tied to specific HSN codes notified by DGFT, which is why alignment between systems is key for smooth and timely claims.
