India has extended its textile
export rebate scheme on apparel exports until March 2024.
India
credit rating agency, ICRA sees the step as providing stability and enabling
apparel exporters to price their products without being concerned about
retrospective changes, according to Mint.
The Union Cabinet chaired by Prime Minister Shri
Narendra Modi has given its approval to continue the Rebate of State and
Central taxes and Levies (RoSCTL) scheme with the same rates as notified by
Ministry of Textiles that was dated 8 March 2019.
India’s government states continuation of the scheme
is expected to make these products globally competitive by rebating all
embedded taxes/levies which are currently not being rebated under any other
mechanism.
The aim is to ensure a stable and predictable policy
regime and provide a level playing field to Indian textiles exporters.
The extended scheme will encourage start-ups and entrepreneurs to
export, generate additional investment and create 100,000 jobs
In an official statement the Ministry of Textiles
said: “It is a globally accepted principle that taxes and duties should not be
exported, to enable a level playing field in the international market for the
exporters. In addition to import duties and GST which are generally refunded,
there are various other taxes/duties that are levied by Central, State and
Local Government which are not refunded to the exporters. These taxes and
levies get embedded in the price of the ultimate product being exported. Such
embedded taxes and levies increase the price of Indian apparel and make it
difficult for them to compete in the international market.”
The scheme launched just one year after the Covid-19 pandemic so extending the scheme aims to provide a stable policy for buyers and exporters who need to have their orders placed well in advance.