Cabinet okays extension of tax rebate scheme for export of garments

The government on Wednesday approved the continuation of the scheme for Rebate of State and Central Taxes and Levies (RoSCTL) on export of garments and made-ups from beyond March 31 till it is merged with the Remission of Duties and Taxes on Exported Products scheme.

"The continuation of the RoSCTL scheme beyond March 31, 2020, is expected to make the textile sector competitive by rebating all taxes/levies which are currently not being rebated under any other mechanism," an official statement said.

The decision was taken at a meeting of the Union Cabinet chaired by Prime Minister Narendra Modi here.

"The rebate of state and central taxes and levies on export of garments and made-ups (RoSCTL) scheme for apparel and made-ups will be continued with effect from 1April, 2020 without any change in scheme guidelines and rates as notified by Ministry of Textiles till such time that the RoSCTL is merged withremission of duties and taxes on exported products(RoDTEP)," the statement said.

The RoSCTL scheme provides rebate on all embedded taxes on exports.

Under the scheme, maximum rate of rebate for apparel is 6.05 per cent, while for made-ups, this goes up to 8.2 per cent. The made-ups segment comprises home textiles products such as bed linen, curtains, pillows and carpets.

Finance Minister Nirmala Sitharaman had in September last year approved the Remission of Duties or Taxes on Export Product (RoDTEP) to incentivise exporters at an estimated cost of Rs 50,000 crore to the exchequer.

She said RoDTEP will replace the existing incentive schemes and "will more than adequately incentivise exporters than the existing schemes put together".