Indian industry bodies hail decision to continue RoSCTL till 2024

14 Jul '21

3 min read

Pic: Shutterstock

Several industry bodies have welcomed the Indian government’s decision to continue the rebate of state and central taxes and levies (RoSCTL) scheme on apparels and made-ups till March 31, 2024. The industry has been pleading to extend the scheme to mitigate the crisis induced by the COVID-19 pandemic and grab emerging opportunities in the post-COVID period.

The government had launched the rebate of state levies (RoSL) scheme in 2016 that was in vogue till February 2019 and later RoSCTL scheme was announced with enhanced rates taking into account all the embedded taxes and levies on various inputs used for garments and made-ups. This scheme was kept in abeyance from January 1, 2021, and a new scheme called remission of duties and taxes on export products (RoDTEP) was announced.

Apparel Export Promotion Council (AEPC) chairman A Sakthivel said the decision will refund all embedded taxes and make Indian products globally competitive. “The scheme will go a long way in bringing back positive sentiments and helping the Indian textile value chain attain $100 billion in annual exports in the next three years,” he said.

Sakthivel said the decision will generate lakhs of new jobs, particularly for the vulnerable sections in the micro, small and medium enterprises (MSME) segment, make the textile and apparel industry more competitive in the global market and help achieve the goal of ‘Aatmanirbhar Bharat’.

Sakthivel said that the scheme will help check the declining trend being witnessed in apparel exports. India’s apparel exports have been losing market share to competitors. It fell 20.8% in one year from $15,509 million in 2019-20 to $12,289 million in 2020-21.

Terming the decision ‘a timely and right intervention’ to put more thrust on apparel and made-ups exports, Prabhu Damodharan, convenor of Coimbatore-based Indian Texpreneurs Federation (ITF), said the clarity offered in the update will help textile exporters better plan growth opportunities and they can scale up and turn competitive.

Tiruppur Exporters’ Association (TEA) president Raja M Shanmugham said as exporters usually take up orders four to six months in advance, the extension will be beneficial for exporters to work out costing. He hoped the revised guidelines for continuation and implementation of the RoSCTL scheme would be announced at the earliest so that applications can be submitted to avail the scrips.

Southern India Mills’ Association (SIMA) chairman Ashwin Chandran said the industry could not make commitments and materialise orders in the absence of RoSCTL benefit and has been stressed during the last couple of months. The announcement gives enough confidence and level-playing field to raise exports and create jobs, he said.

Chandran also welcomed the decision of the cabinet committee to cover all remaining textile products in the value chain in the RoDTEP scheme that would enhance global competitiveness of yarns and fabrics.

According to Gautam Nair, managing director of Gurgaon based Matrix Clothing Pvt Ltd, which exports knitted apparel, the two points worth appreciating are that the old RoSCTL rates have been continued and the extension is for five years that gives exporters some stability in pricing.

The extension of RoSCTL till March 2024 is going to help all apparel and made-ups vendors, says Vishal Dhingra of Noida-based buying house Specialty Merchandising Services, and chairman of both Buying Agents Association (BAA) and PHD Chambers of Commerce (FTIC). "Apparel and made-ups vendors now get a consistent policy till 2024 wherein all taxes paid prior to exports are refunded to them. It’s a different scheme from RoDTEP. You will see a lot of investment in this sector now."

Fibre2Fashion News Desk (DS)

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