Indian exporters are losing a large part of rebate provided by the central government under its Rebate of State and Central Taxes and Levies (RoSCTL) as reimbursement of taxes. They are estimated to lose over $128 million (around ₹1,200 crore) annually at a time when they are already under stress due to higher cost of both raw material and production.

Exporters fear that they may lose further competitiveness in the global market if the government does not redress soon. According to them, mediators and brokers manipulate the system and purchase the scrips at deep discount of up to 20 per cent. Importers can use the scrips for payment of import duty for their imports.

An exporter from Panipat said that earlier there was little premium on the scrips when the scheme was launched in 2021. But today the exporters find it difficult to find potential buyers.

Apparel Export Promotion Council (AEPC) and other industry bodies are urging the government to pay the rebate in cash instead of scrips of RoSCTL.

Raja M Shanmugham, president of Tiruppur Exporters’ Association (TEA) told Fibre2Fashion, “ROSCTL scrips are sold at around 80 per cent of their value. It is denting the expected support from the government on value term. We requested the government to pay RoSCTL dues in cash like previous Duty Draw Back scheme.”

AEPC said in a statement that Indian textile industry will rapidly lose its global export competitiveness if imbalances in the RoSCTL scheme are not addressed immediately. “The scheme in its current form is eroding the export margins of the domestic textile industry.”

As per industry estimates, the exporters will lose benefits of roughly ₹1,200 crore in one year. They get about 5 per cent (roughly ₹6,000 crore) of total apparel export of $16 billion.

Fibre2Fashion News Desk (KUL)

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