Considering the outbreak of COVID-19 and complete lockdown of the nation thereafter, the government has decided to continue Rebate of State and Central Taxes and Levies (RoSCTL) from 1st April, 2020 onward. A decision to this effect was taken in the Union Cabinet meeting held yesterday. Now RoSCTL will continue until such time that the scheme is merged with Remission of Duties and Taxes on Exported Products (RoDTEP).
“RoSCTL scheme for apparel and made-ups will be continued with effect from 1st April, 2020 without any change in scheme guidelines and rates as notified by Ministry of Textiles till such time that the RoSCTL is merged with RoDTEP,” the government stated in a statement.
The Scheme for RoSCTL for export of garments and made-ups came into effect from 7.3.2019. Under this scheme state and central taxes and levies which are present in the cost of exports of garments and made-ups would be rebated. It is an export incentive in the form of transferable and sellable duty credit scrips offered on the basis of the FOB value of the export. It replaced the Rebate of State Levies (RoSL) scheme, a monetary incentive scheme under which Customs would deposit the rebate directly into the exporter’s bank account.
Continuation of RoSCTL beyond 31st March, 2020 is expected to make the textile sector competitive by rebating all taxes/levies which are currently not being rebated under any other mechanism.
It may be noted that the government, had on March 13 approved RoDTEP, a scheme for exporters to reimburse taxes and duties paid by them such as value added tax, coal cess, mandi tax, electricity duties and fuel used for transportation, which are not getting exempted or refunded under any other existing mechanism. It is expected that being a WTO compliant policy, it would help exporters to meet international standards for exports and to raise a better economy for their business.