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Garment exporters seek changes to RoSCTL

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NEW DELHI : Garment exporters have appealed to the Union government to provide benefits under the Rebate of State and Central Taxes and Levies (RoSCTL) in cash directly to the exporters and not as scrips.

Vijay Jindal, President of Garment Exporters and Manufacturers Association, said in a press release that credit scrips of exporters are trading at almost 20% discount. The scrips are trading at discounts largely due to new conditions imposed recently in the RoSCTL Scheme. Exporters may suffer ₹1,500 crore loss because of this.

Mr. Jindal said, “RoSCTL scheme provides rebate against the taxes, levies, etc. that are already paid by the exporters on the inputs. These rebate has been converted into scrips that are tradable i.e. exporters can sell scrips to the importers and importers, in turn, can pay import duty with these purchased scrips as an alternative to cash import duty payments. While it was in discount earlier also, now the discount has gone up from 3% to about 20% on the scrips. This discounting of scrips benefits importers, who are taking undue advantage at the cost of exporters.” The government should restart cash reimbursement instead of tradable scrips, he said.

Harish Ahuja, Executive Member of Apparel Export Promotion Council, said, “At present, demand for such scrips is very less as exporters are finding it difficult to find enough importers who can buy the scrips obtained under the RoSCTL scheme. Lack of demand means that importers offer to buy scrips only at a steep discount of up to 20%. If not addressed, India may lose its edge in global textile markets.”

Indian textile industry will rapidly lose its global export competitiveness if imbalances in the RoSCTL scheme are not addressed immediately. The scheme is to make the textile industry competitive and strengthen exports. India currently exports textile and clothing worth more than $ 44 billion, including $ 16 billion of apparels and garments. However, the Scheme in its current form is eroding the export margins of the domestic textile industry. If the government does not make amendments to the RoSCTL structure, there is a concern that the industry may lose its competitive edge due to cost inefficiencies, they said.

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