The Union Cabinet has given the green light for the extension of the Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) for the export of apparel/garments and made-ups. The approval comes to foster a stable policy regime, crucial for the long-term planning of trade, particularly in the textile sector where advance orders are prevalent for extended delivery periods.
The RoSCTL, originally sanctioned by the Union Cabinet until 31 March 2020, saw subsequent approvals for continuation until 31 March 2024. The recent extension until 31st March 2026 is poised to enhance the export competitiveness of the garments and made-up sectors. By making these products cost-competitive, the scheme aligns with the principle of zero-rated export, ensuring a level playing field in the international market.
Further, the cabinet stated that the scheme’s primary objective is to compensate for state and central taxes and levies, in addition to the Duty Drawback Scheme, on the export of apparel/garments and made-ups by providing a rebate.
This approach aligns with the internationally accepted principle that taxes and duties should not be exported. Therefore, not only are indirect taxes on inputs rebated or reimbursed, but other un-refunded State and Central taxes and levies are also rebated.
Additionally, the rebate of state taxes and levies encompasses various components, including value-added-tax (VAT) on fuel used in transportation, captive power, mandi tax and duty of electricity.
On the other hand, the rebate of central taxes and levies covers central excise duty on fuel used in transportation and embedded CGST paid on inputs such as pesticides and fertilisers used in the production of raw cotton.
