The government on Tuesday decided to restore the rate of the remission of state levies (RoSL) under the duty drawback scheme available to garments exporters in the pre-GST period, in a bid to support the labour-intensive sector. Following the introduction of the GST, the government had recently cut the RoSL rate to a uniform 0.39% of the freight-on-board value of products meant for exports (up to September 2017), against the pre-GST levels of 2.9-3.9%. Garment exporters, however, protested against the move and requested the finance ministry to restore the earlier RoSL rate.
In a statement on Tuesday, the textile ministry said: “In order to support exporters of garments and made-ups, the government has announced as a transitional arrangement that for the period July 1 to September 30, 2017, the exporter may claim ROSL at the rates prior to introduction of GST.”
The government earlier decided to reduce the interim rate, as most of the state levies had been scrapped in the GST regime. Only two state levies (value-added tax on petroleum products and electricity charges) would continue under the GST regime as well, on the basis of which the 0.39% interim refund structure was based, a senior government official had told FE last week.
RoSL, under which garment exporters get refunds from the Centre against all the levies they pay at the states’ level, is the most important scheme in the Rs 6,000-crore garments package announced last year. The government has budgetted Rs 1,555 crore for the RoSL scheme in 2017-18. Apparel exports have been registering double-digit growth since the start of the disbursement of RoSL (around December last year). During March and April, garment exporters were able to increase production by around 30% and employed at least 5% more workers during the same period, according to Apparel Exports Promotion Council chairman Ashok G Rajani.