Changes made in an export scheme, Rebate of State and Central Taxes and Levies (RoSCTL), will help the apparel industry meet its working capital requirement and promote garment exports, AEPC said on Friday.
The government has made amendments in the customs rules pertaining to the use of RoDTEP (Remissions of Duties and Taxes on Exported Products) and RoSCTL scrips by exporters. The changes will safeguard the transferee who purchased the scrip in good faith.
Under the RoSCTL scheme, all embedded state and central taxes/levies for exports of manufactured goods and garments are reimbursed to exporters.
Apparel Export Promotion Council (AEPC) Chairman Naren Goenka said the move would benefit the apparel and made-up sector.
“The amendment will provide much-needed relief to the garment sector and ensuring maximum refund of RoSCTL amount will help exporters meet their working capital requirements. Further, it will give an impetus to the garment sector to perform better at a much faster pace,” he said.
According to the council, even though the RoSCTL aimed to reimburse the taxes paid by the exporters to the Central or State Governments, under RoSCTL the rebate was not directly transferred to the exporters in cash, but this was granted to exporters of garments and made-ups in the form of freely transferable duty credit scrips.
Exporters can either use these scrips to pay Basic Custom Duty (BCD), on their own imports or they can sell the duty credit scrips to other importers. The RoSCTL scrip has limited usage as it could be used only for payment of BCD.
Under the RoSCTL scheme, maximum rate of rebate for apparel is 6.05 per cent while for made-ups it is 8.2 per cent.
“Amendment made in RoSCTL will help the industry meet its working capital requirement and thrust garment exports,” he added.