Policy

Input duty rebate scheme for garments, made-ups to continue for 3 years

Our Bureau New Delhi | Updated on August 13, 2021

Exporters say move will bring in stability, help fight competition from Vietnam, Bangladesh, Cambodia

In a move aimed at enhancing global competitiveness of the textile sector, the Centre has notified continuation of a popular scheme for remitting embedded taxes and levies on 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.

The decision is in line with the Union Cabinet’s decision last month which approved extension of the scheme, called the Rebate of State and Central Taxes and Levies (RoSCTL), till March 2024. The maximum rate of rebate fixed earlier by the Textile Ministry for the scheme is 6.05 per cent for apparels and 8.2 per cent for made ups.

The extension of the scheme, however, is subject to review of the rates periodically. “A mechanism for such revision shall be decided separately by the Ministry of Textiles and Ministry of Finance,” said a notification issued by the Textiles Ministry on Friday.

Eligibility criteria

The eligibility criteria under RoSCTL shall remain unchanged and the scheme will be available for only export of garments and made-ups (which include items such as 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, are of the view 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.

Published on August 13, 2021

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