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Rebate of State and Central Taxes and Levies (RoSCTL) Scheme : Extension

Kumari Sonali

Rebate of State and Central Taxes and Levies (RoSCTL) Scheme: Extension

The government may extend the tenure of the Rebate of State and Central Taxes and Levies (RoSCTL) scheme, an export-boosting incentive for the textile sector, beyond September 30, an official aware of the matter said recently.

  • Rebate of State and Central Taxes and Levies (RoSCTL) Scheme is a significant export incentive framework introduced by the Ministry of Textiles in 2019.
  • Objective is to compensate for the State and Central Taxes and Levies in addition to the Duty Drawback Scheme on export of apparel/garments and Made-ups by way of rebate.
  • It aims to reimburse all embedded State and Central Taxes/Levies for exports of manufactured goods and garments.
  • These taxes are incurred during the production of garments and made-ups before export.
  • It has been established as a successor for the old “Rebate of State Levies (RoSL) Scheme.
  • The difference between the RoSL & RoSCTL Schemes is that under the RoSL Scheme, there was no benefit on the central tax and levies.
  • But in the RoSCTL scheme, the exporter will get a rebate of both State and Central tax and Levies.
  • Many taxes (like electricity duty, mandi tax, fuel tax, etc.) get embedded in production costs.
  • These cannot be claimed through GST or duty drawback.
  • RoSCTL refunds these leftover taxes, reducing production cost and increasing competitiveness.
  • It is based on an internationally acceptable principle that taxes and duties should not be exported, to enable a level playing field in the international market for exports.
  • Hence, not only indirect taxes on inputs are to be rebated or reimbursed, but also other un-refunded State & Central taxes and levies are to be rebated.
  • It provides transferable and sellable duty credit scrips to exporters based on the Free on-board (FOB) value of their exports.
  • The scrips shall be issued electronically on the Customs system.
  • The duty credit scrips shall be used for payment of Basic Customs Duty on the import of goods. These scrips shall be freely transferable.
  • The duty credit available in an e-scrip shall be transferred at a time for the entire amount in the said e-scrip to another person, and transfer of the duty credit in part shall not be permitted.
  • The period of validity of the e-scrip, of one year from its creation, shall not change on account of transfer of the e-scrip.
  • All exporters of garments/apparel and made-ups manufactured in India are eligible to take benefit under this scheme, except entities/IECs under the Denied Entity List of the Directorate General of Foreign Trade (DGFT).
  • Implementing agency: It is implemented by the Department of Revenue, Ministry of Finance.