New Delhi: A meeting of the Union Cabinet chaired by Prime Minister Narendra Modi Wednesday approved the continuation of two schemes for giving relief to garment exporters on central and state taxes until March 2024. Two schemes, The Rebate of State and Central taxes and Levies (RoSCTL) scheme and Remission of Duties and Taxes on Exported Products (RoDTEP) scheme have now been extended till March 2024 on the same terms and conditions as notified by the ministry of textiles in March 2019. These schemes cover exports of garments and apparels listed in chapter 61, 62 and 63 of the notification.
In addition to this, other textiles products (excluding Chapters-61, 62 and 63) which are not covered under the RoSCTL shall also be eligible to avail the benefits, under the RoDTEP scheme along with other products as will be finalised by the department of commerce. “Continuation of RoSCTL for apparel and garments and made-ups is expected to make these products globally competitive by rebating all embedded taxes and levies which are currently not being rebated under any other mechanism,” said the government.
Information and Broadcasting Minister Anurag Thakur said the decision will will ensure a stable and predictable policy regime and provide a level playing field to Indian textiles exporters. “It will promote startups and entrepreneurs to export and ensure creation of lakhs of jobs,” he said.
Read: After 15 months, Modi to physically meet his cabinet ministers today
Tax relief to exporters
The government said the decision was in line with the globally accepted principle that taxes and duties should not be exported. Exporters have been asking for the relief as levy of several state duties and taxes, that are not refunded, makes Indian products uncompetitive in the global market.
Countries like Bangladesh and Vietnam have greater market share in the global market for apparels and textiles. These two schemes will cover those taxes and duties that get embedded in the exported goods and make it difficult for Indian exporters to compete in the international market.
Tax, duties covered under the schemes
RoSCTL and RoDTEP will cover central and state taxes, duties and cesses on the fuel used for transportation of goods, generation of power and for the farm sector. The schemes will also cover mandi tax, duty on electricity charges at all levels of the production chain, stamp duty, GST paid on input such as pesticides, fertilizers and the GST paid on purchases from unregistered dealers. The schemes will also cover cess on coal or any other products.
Read: PM Modi chairs first in-person Union Cabinet meet in over a year
