Government to extend validity of tax refund program for apparel exporters
14th August 2021, Mumbai:
The Indian Government has decided to extend the validity of a key tax refund program for garments and made-up exporters by over three years up to March 2024. As per Financial Express, this will ease liquidity flow to the critical labor-intensive sector in the aftermath of the pandemic.
The government will retain the extant refund rates under the Rebate of State and Central Taxes & Levies (RoSCTL) scheme for some more time. At present, garment exporters get scrips up to about 6 per cent of the freight-on-board value of the products and made-up exporters are entitled to a maximum of 8.2 per cent. The notification ends uncertainties over the continuation of tax refunds and will prop up garment exports that have lost pace of late.
A mechanism for reviewing the rates periodically will be devised by the ministries of finance and textiles.
With this, the government also scrapped its earlier plan to replace the RoSCTL with the Remission of Duties and Taxes on Exported Products (RoDTEP), which is expected to be operationalized soon.
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