Government extends tax exemption scheme for export of garments by 2 years
New Delhi: The Union Cabinet chaired by Prime Minister Narendra Modi on Thursday approved the continuation of the Scheme of Rebate of State and Central Taxes and Levies (RoSCTL) for exports of apparel/garments and made-ups till March 31, 2026. .
Continuation of the scheme for the proposed period of two years will provide a stable policy regime which is essential for long-term business planning, especially in the textile sector where advance orders can be placed for long-term deliveries.
Continuation of RoSCTL will help in removing the burden of taxes and levies and provide level playing field on the principle that “goods are exported and not domestically taxed”.
Highlights of the budget:
The Union Cabinet had approved the scheme till 31.03.2020 and approved continuation of RoSCTL till March 31, 2024.
The objective of the scheme is to offset State and Central taxes and levies other than duty drawback scheme on exports of apparel/garments and made-ups through rebates. It is based on the internationally accepted principle that taxes and duties should not be imposed on exports in order to provide a level playing field in the international market for exports. Therefore, not only indirect taxes on inputs are to be exempted or reimbursed, but other non-refundable state and central taxes and levies are also to be exempted.
