In a move aimed at enhancing the global competitiveness of the textile sector, the Centre has notified the continuation of a popular scheme for remitting embedded taxes and levies on the export of garments and made-ups for about three years, from January 1, 2021 to March 31, 2024, with the same rates as notified earlier by the Ministry of Textiles subject to periodic review.
This is in line with the Union Cabinet’s decision last month which approved the extension of the scheme, called the Rebate of State and Central Levies and Taxes (RoSCTL), till March 2024. The maximum rate of rebate fixed earlier by the Textile Ministry for the scheme is 6.05 per cent for apparel and 8.2 per cent for made-ups.
The extension of the scheme, however, is subject to the review of the rates periodically. “A mechanism for such revision shall be decided separately by the Ministry of Textiles and Ministry of Finance,” per a notification issued by the Textiles Ministry on Friday.
The eligibility criteria under RoSCTL shall remain unchanged, and the scheme will be available for only the export of garments and made-ups (including bed sheets, curtains, pillow covers and towels). “The other textiles products which are not covered under the RoSCTL shall be eligible to avail the benefits, if any, under the RoDTEP, as to be finalised by Department Commerce from the dates which may be notified in this regard,” the notification added.
“The decision adds to the stability of the export policy of textiles. We now look forward to being a stronger global player with this continued RoSCTL support. The scheme will promote start-ups and entrepreneurs to start exporting their products. It will rejuvenate the textiles sector and, in three years, the Indian textile value chain can attain annual exports of $100 billion,” said A Sakthivel from the Apparel Export Promotion Council.
Many export bodies, including the Apparel Export Promotion Council, believe that the continuation of the scheme would help Indian exporters compete against countries like Vietnam, Bangladesh and Cambodia, that have tariff advantage on account of LDC status or owing to effective free trade agreements. Despite the growing challenge in the global market, garments and made-ups are among the top export items from the country.