Introduction: On February 8th, 2024, the Ministry of Textiles, Government of India, released a notification outlining the extension of the Scheme for Rebate of State and Central Taxes and Levies (RoSCTL). This initiative aims to bolster the competitiveness of apparel and made-ups exports by addressing embedded taxes and levies.
Detailed Analysis: The RoSCTL scheme, initially introduced to rebate embedded State and Central Taxes and Levies on garment and made-up exports, has been extended in line with the government’s objective to enhance the competitiveness of these sectors. Notably, the scheme, which was set to expire on March 31, 2024, will now continue for an additional two years until March 31, 2026, excluding RoDTEP for these chapters.
The extension ensures stability in the export policy regime and supports the cost competitiveness of textile products. Rates under the scheme will be periodically reviewed by the Ministry of Textiles and Ministry of Finance, with expenditure monitored by a committee to prevent exceeding allocation amounts.
Implementation of the RoSCTL scheme will involve end-to-end digitization by the Department of Revenue, streamlining processes for issuing transferable Duty Credit Scrip. Notably, Duty Credit Scrip will be issued without the requirement of realizing export proceeds, streamlining the export process.
The guidelines outlined in the Ministry’s previous notification will continue to govern the implementation of the RoSCTL scheme until March 2026, ensuring consistency and clarity in policy execution.
Conclusion: The extension of the RoSCTL scheme underscores the government’s commitment to fostering competitiveness and stability in the textile sector. By addressing embedded taxes and levies, this initiative aims to facilitate the growth of apparel and made-ups exports, contributing to the overall economic development of the country. The streamlined implementation process and periodic reviews ensure effective utilization of resources while maintaining the integrity of the scheme.
MINISTRY OF TEXTILES
New Delhi the 8th February, 2024
Continuation of Scheme for Rebate of State and Central Taxes and Levies on Export of Apparel/Garments and Made-ups (RoSCTL)
F. No. 12015/11/2020-TTP.—In pursuance of the decision of the Government of India to rebate all embedded State and Central Taxes and Levies on export of garments and made-ups to enhance competitiveness of these sectors, the Ministry of Textiles vide notification No. 14/26/2016-IT (Vol.II) dated 07.03.2019 notified the Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) which was in force up to 31.03.2020. Vide Notification No 12015/11/2020-TTP dated 17.04.2020, the Government decided to continue the said Scheme w.e.f. 01.04.2020 without any change in Scheme guidelines and rates, as notified vide Ministry of Textiles’ Notification Nos. 14/26/2016-IT (Vol.II) dated 7.3.2019 and 14/26/2016-IT (Vol.II) dated 8.3.2019, respectively. Government had extended continuation of RoSCTL scheme on exports of Apparel/Garments (Chapters-61 & 62) and Made-ups (Chapter-63) till 31st March 2024 vide Notification dated 13.08.2021 in order to make textiles products cost competitive and to provide stability to the export policy regime.
2. Further, the Government has decided to continue the RoSCTL scheme for a period of 2 years beyond 1st April 2024 and upto 31st March 2026 for apparel/garments (under Chapter 61 and 62) and Made-ups (under Chapter 63) in exclusion of RoDTEP for these Chapters.
3. Rates under the scheme shall be subject to review as per periodicity to be decided separately by Ministry of Textiles and Ministry of Finance. To ensure that the expenditure under these Schemes do not exceed the allocation amount, the expenditure and liability under these Schemes shall be reviewed on quarterly basis by a Committee headed by Department of Expenditure (DoE) and consisting of Department of Revenue (DoR), Department of Commerce (DoC) and Ministry of Textiles (MoT) and measures as necessary, shall be taken to keep the expenditure within the prescribed allocation. Government reserves the right to suitably adjust the rate and caps in the light of change in relevant underlying conditions. However, eligibility criteria under RoSCTL shall remain unchanged. The other textiles products (excluding Chapter 61,62 and 63) which are not covered under the RoSCTL shall be eligible to avail the benefits, if any, under RoDTEP along with other products.
4. The Scheme shall be implemented by Department of Revenue with end to end digitization for issuance of transferable Duty Credit Scrip, which will be maintained in an electronic ledger in the Customs system. Duty Credit Scrip under RoSCTL Scheme shall be issued without insisting on realization of export proceeds.
5. The guidelines issued vide this Ministry’s notification No. 12015/11/2020-TTP dated 13.08.2021 would continue for continuation and implementation of the RoSCTL scheme till March, 2026.
SHUBHRA, Trade Advisor