Indirect Tax Alert: Customs - Extension of validity of Rebate of State & Central Taxes and Levies (‘RoSCTL’) Scheme
06 October 2020
Rebate of State and Central Taxes and Levies on Export of Garments and Made-ups (RoSCTL) Scheme is for rebate of all state and central embedded levies for apparel and made-up textile segments, which would make shipments zero-rated, thereby boosting the country’s competitiveness in export markets.
At the request of the Textile and Apparel Industry, the Ministry of textiles vide notification F.No. 12015/11/2020-TTP on 17 April 2020, extended the RoSCTL Scheme with effect from 01 April 2020 until such time that the RoSCTL Scheme is merged with Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme without any change in Scheme guidelines and rates notified by the Ministry of Textiles.
RoDTEP reimburses taxes and duties which are actually suffered and not refunded under any other scheme, in conformity with WTO trade norms and best global practises. There are certain taxes/duties/levies that are outside Goods and Services Tax (GST) and are not currently refunded on exports, such as, VAT on fuel used in transportation, Mandi tax, Duty on electricity used during manufacturing, Stamp duty, etc. These taxes would be considered for the benefit under RoDTEP. The rebate shall be claimed as a percentage of Free on Board (FOB) value of exports.
In line with the above said notification, the Ministry of Finance has now issued an amendment Notification dated 05 October 2020, to the parent Notification No.13/2020-Customs dated 14 February 2020, whereby the validity of RoSCTL Scheme has been extended from 31 March 2020 to 31 March 2021, or until such date the RoSCTL scheme is merged with the RoDTEP scheme, whichever is earlier.
BDO Comments
While the Ministry of Finance has issued an amendment towards an extension on the validity of period of RoSCTL Scheme, the Ministry of Commerce, is yet to announce a similar extension to ensure effective completeness to the Scheme under the Foreign Trade Policy (‘FTP’).
[ Notification no: 36/2020- Customs dated 05 October 2020]