Scheme for Rebate of State and Central Taxes and Levies (RoSCTL)

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Context

• The Union Cabinet, led by Prime Minister Shri Narendra Modi, has approved the extension of the Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) for the export of Apparel/Garments and Made-ups until March 31, 2026.

Scheme for Rebate of State and Central Taxes and Levies (RoSCTL)

• Introduced on March 7^th2019, this scheme aims to provide support to exporters selling textile internationally.

Eligibility:

• Merchants or manufacturer-exporters directly exporting garments and apparel manufactured in India qualify for the RoSCTL scheme.
• Entities listed in the 'Denied Entity List of DGFT' cannot avail scheme benefits.
• An exporter can only avail RoSCTL benefits if they haven't utilized the RoDTEP scheme.

Implementation:

• RoSCTL is implemented by the Department of Revenue, featuring end-to-end digitization for transferrable Duty Credit Scrip maintained in the customs system.

Benefits:

• Enables exporters to reduce logistics and other costs, enhancing competitiveness in global markets.
• Provides rebates on both State and Central taxes and levies.

Tradeable Scrips:

• Exporters receive Duty Credit Scrips for embedded taxes, which can be traded. These scrips can be utilized to pay basic customs duty for importing equipment, machinery, or other inputs.

Rebates under RoSCTL Scheme:

• Eligible exporters receive rebates at rates specified by the Ministry of Textiles, aligned with State and Central taxes and levies for clothing and made-ups.
• Central taxes eligible for refund include central excise duty on transportation fuel, embedded CGST, and compensation cess on coal production for electricity.
• Refundable state taxes encompass VAT on transportation fuel, Mandi tax, duty of electricity, and embedded SGST on inputs for raw cotton production.

Restrictions on Rebate:

• Ineligible goods for RoSCTL include those exported through trans-shipment, subject to minimum support price or export duty, deemed goods under Foreign Trade Policy, and goods manufactured in Special Economic Zones.
• Goods taken into use after manufacturing or reconditioning, those not claimed in a shipping bill, or those from Domestic Tariff Areas to Special Economic Zones are ineligible.

Documents Required for RoSCTL Scheme:

• Importer Exporter Code (IEC)
• Shipping bills
• Digital signature certificate
• DGFT registration

RoDTEP Scheme:

• Launch: Introduced in January 2021, RoDTEP replaced the MEIS Scheme, aligning with WTO compliance requirements. The scheme aims to neutralize costs on exported goods by providing rebates on hidden central, state, and local duties, levies, and taxes.
• Features:
• Refunds SMEs for hidden costs in inputs for exported products, encouraging small exporters with duty scrips.
• Addresses added-on GST in production and distribution, enhancing global competitiveness.
• Refunds previously non-refundable duties and taxes, including those on electricity, Mandi Tax, Municipal Tax, VAT, Excise Duty, and more.
• Emphasizes automation and digitization for quick and efficient processing of refunds.
• Eligibility: The scheme covers 10,342 export items, including textiles and apparel, with detailed tariff lines accessible through the DGFT’s website.

PRACTICE QUESTION Question: Consider the following statements regarding the Scheme for Rebate of State and Central Taxes and Levies (RoSCTL): A.RoSCTL is applicable to a wide range of export items, including electronics and machinery. B.The recent extension of RoSCTL till March 2026 indicates the government's commitment to supporting the growth of the textile industry. C.Entities listed in the 'Denied Entity List of DGFT' are eligible to avail benefits under RoSCTL. D.RoSCTL primarily focuses on providing rebates on customs duties for imported raw materials used in the manufacturing of export goods. Which of the statements is/are correct? 1.    A and B only 2.    B and C only 3.    B only 4.    A, B, and D only Answer: 3. B only Explanation: Statement A is incorrect. RoSCTL is specific to the export of Apparel/Garments and Made-ups, not a wide range of export items. Statement B is correct. The recent extension of RoSCTL till March 2026 indicates the government's commitment to supporting the growth of the textile industry. Statement C is incorrect. Entities listed in the 'Denied Entity List of DGFT' are not eligible to avail benefits under RoSCTL. Statement D is incorrect. RoSCTL focuses on providing rebates on State and Central taxes and levies, not customs duties for imported raw materials. Therefore, the correct answer is 3. B only.