RoDTEP and Export Incentives for Indian Handicrafts

RoDTEP (Remission of Duties and Taxes on Exported Products) refunds the embedded taxes and duties that Indian exporters cannot recover through any other mechanism — input GST, state levies, and certain central duties — by issuing a transferable electronic scrip. For Indian handicraft exporters, the scheme is the primary successor to the now-discontinued MEIS and is one of the few direct, transaction-level export incentives that genuinely applies to craft goods. Claims are processed through the shipping bill on ICEGATE, and the scrip is credited to the exporter’s ledger for use against future customs duty or for transfer/sale.

What RoDTEP actually does

RoDTEP is a WTO-compatible refund mechanism. Its purpose is to ensure that exported goods leave India free of all embedded taxes and duties, including those that are not rebated through standard GST refund, drawback, or exemption routes.

Three points matter for handicraft exporters:

• It is not an export subsidy or profit. It is a refund of taxes already paid somewhere in the supply chain.
• It is delivered as a duty-credit scrip in the exporter’s electronic ledger on the DGFT/ICEGATE platform.
• It replaced the earlier MEIS (Merchandise Exports from India Scheme) from 1 January 2021, after MEIS was found non-compliant at the WTO.

For craft exporters who work on thin margins — many Indian handicrafts are labour-heavy and use locally sourced material — the scrip often makes the difference between a viable shipment and a loss-making one.

How the scheme works in practice

The flow is straightforward once an exporter is set up:

1. Goods are manufactured or sourced in India and exported under a valid IEC.
2. The exporter or CHA files the shipping bill on ICEGATE and declares the RoDTEP claim against the applicable ITC-HS code.
3. Customs (CBIC) processes the claim at the port of export.
4. On realisation of export proceeds in foreign exchange, the scrip is credited to the exporter’s RoDTEP ledger.
5. The scrip can be used to pay Basic Customs Duty on subsequent imports, or transferred/sold to another importer who needs to discharge duty.

The scrip value depends on the FOB value of the shipment multiplied by the notified RoDTEP rate for that ITC-HS code. Rates are set by a committee and notified by the Government of India, and they vary by product group. Handicrafts typically sit across many HS chapters — textiles, wood, metal, glass, paper, leather, stone — and the rate applicable to any consignment depends on the correct classification of the dominant product.

Note: verify current per-HS-code RoDTEP rates and any active caps or rate revisions on the official DGFT RoDTEP page (https://www.dgft.gov.in/CP/?opt=RoDTEP) before quoting to a buyer or booking a contract.

Who is eligible and what handicrafts qualify

Broadly, RoDTEP applies to:

• Goods manufactured in India and exported under a valid IEC.
• Goods that are not specifically excluded under the relevant RoDTEP schedule.
• All categories of exporters — merchant exporters, manufacturer-exporters, and EOUs — subject to the conditions in the scheme.

For handicrafts, the practical eligibility question is almost always one of ITC-HS classification. A consignment described loosely as “handicraft” can sit under very different HS codes — a carved wooden panel, a brass deity, a hand-block printed cotton table runner, and a papier-mâché box are all “handicrafts” but sit in different chapters and may attract different RoDTEP rates. EPCH (Export Promotion Council for Handicrafts) can help members with classification queries, and any CA or customs broker handling your shipment should confirm the code before filing.

Step-by-step claim checklist

Before the shipping bill is filed:

• IEC is active and linked to the GSTIN on the GST portal.
• Export invoice, packing list, and shipping bill all carry the same HS code and product description.
• The RoDTEP rate applicable to the declared HS code is noted in the shipping bill under the correct field.
• LUT (Letter of Undertaking) is on file if exporting without payment of IGST.
• EDPMS/IDPMS obligations are understood — the scrip is credited only after foreign exchange is realised.

After shipment:

• Track the shipping bill status on ICEGATE.
• Once realised, the scrip appears in the RoDTEP ledger on the DGFT/ICEGATE platform.
• Use the scrip to pay customs duty, or sell/transfer it through a permitted broker.

A simple worked illustration

A handicraft exporter in Moradabad ships a consignment of brass decorative items valued at ₹20 lakh FOB, declared under an applicable HS code for brass handicrafts. If the notified RoDTEP rate for that code is, illustratively, “X%” on the date of export, the scrip value would be approximately ₹20,00,000 × X / 100. That scrip can be used to pay Basic Customs Duty on the next import of, say, raw brass or finishing inputs, or sold in the market. The exact figure depends on the rate in force on the date of export — treat any number a broker or tool gives you as a draft until you confirm it on the DGFT RoDTEP page.

What handicraft exporters commonly get wrong

• Filing the wrong HS code and then claiming a higher RoDTEP rate — the single biggest audit risk.
• Not reconciling FOB value in the shipping bill with the bank realisation certificate (BRC) — a mismatch can hold up scrip credit.
• Treating the scrip as income — it is duty credit, and the underlying duty is still a tax for accounting purposes.
• Missing the realisation window — if the foreign buyer delays payment beyond the period allowed under foreign exchange rules, the scrip will not be credited.

Where GreenFlip India fits in

RoDTEP improves the unit economics of every consignment, but it does not, on its own, find the buyer. GreenFlip India (greenflip.in) works with Indian handicraft exporters on the export side — classification, documentation, and scheme compliance — and connects into the wider GreenFlip network (greenflip.org) for cross-border demand from overseas buyers of Indian craft. The incentive is most useful when the order book is steady enough to absorb the scrip against recurring import needs.

Bottom line

RoDTEP is the principal central-government refund of embedded taxes for Indian handicraft exports, replacing MEIS and delivered as a transferable electronic scrip after export proceeds are realised. The actual benefit depends entirely on the correct ITC-HS code, the FOB value, and the rate notified on the date of export — verify the rate on the DGFT RoDTEP page (https://www.dgft.gov.in/CP/?opt=RoDTEP) before you quote. Pair the incentive with clean documentation and accurate HS classification, and it becomes a reliable, recurring margin-recovery tool for Indian handicraft exporters.

Note: This guide is general information for planning, not legal, tax, or customs advice. Indian trade rules change — always confirm current requirements on the official portal (DGFT, ICEGATE/CBIC, the GST portal, or BIS) or with a licensed customs broker before you ship.