The Indian Cabinet agreed on July 14 to extend the implementation of the textile export tax rebate program (Rebate of State and Central Taxes and Levies, RoSCTL) for three years until March 31, 2024. The Indian Ministry of Textiles stated on August 13 that in the future, exporters will be able to obtain subsidies before receiving payment, but must retain relevant application information. The government will set up a defense mechanism to supervise exporters’ financial statements to confirm that export payments are actually accounted for. At the same time, in order to ensure financial Stable, government expenditure and liabilities will be reviewed on a quarterly basis, and the Central Board of Indirect Taxes and Customs (CBIC) will also set up a risk management system (RMS) to check exporters’ accounts.
According to the RoSCTL plan, the taxes subsidized to exporters include: business tax on transportation energy (VAT), agricultural product purchase/sales tax (Mandi Tax), electricity tax (Electricity Duty) ), export document stamp tax (Stamp Tax), goods and services tax (GST) on the use of pesticides and fertilizers in growing cotton, coal cess (Coal Cess), etc. The exporter will obtain an electronic tax refund credit certificate issued by the customs after the product is exported ( Duty Credit Scrip), which can be used to pay basic duties on imported machinery and equipment or raw materials in the future and is transferable. The maximum tax rebate rate for the RoSCTL program is 6.05% for the export of ready-made garments (Apparel), and 8.2% for home textiles (Made ups, such as towels, curtains, carpets, pillows, bed sheets, etc.). As for other textiles not included in the RoSCTL program, the maximum tax rebate rate is 6.05%. Seek subsidies from the Ministry of Commerce and Industry’s “RoDTEP”.
A Sakthivel, chairman of the Readymade Apparel Export Promotion Council (AEPC) and president of the Federation of Indian Export Organizations (FIEO), said that the RoSCTL plan will be significantly extended for three years to provide a stable policy environment. It will attract investment and start-ups, improve the global export competitiveness of India’s textiles, and compete with Bangladesh, Vietnam, Myanmar, Laos, Sri Lanka and other countries. The export value of India’s textile value chain will reach 100 billion US dollars.
