Introduction Brief History
Apparel and Made-Ups Sectors were supported under the Scheme for Rebate of State Levies (RoSL). ROSL Scheme (Old Scheme) was a monetary incentive scheme under which Customs would deposit the rebate directly into the exporter’s bank account.
However, certain State as well as Central Taxes continued to be present in the cost of exports; which made the exports less competitive.
Introduction Brief History
Apparel and Made-Ups Sectors were supported under the Scheme for Rebate of State Levies (RoSL). ROSL Scheme (Old Scheme) was a monetary incentive scheme under which Customs would deposit the rebate
directly into the exporter’s bank account.
However, certain State as well as Central Taxes continued to be present in the cost of exports; which made the exports less competitive.
Objective
To rebate all embedded State and Central Taxes and Levies on Apparel and Made-Ups with a view to enhance competitiveness of these sectors and also in reaction to the international pressure on export incentives which the US in particular has been very vocal and urging the discontinuation of export incentives like the MEIS on ground of violations as per WTO; the Rebate of State & Central Taxes and Levies (RoSCTL) Scheme has been introduced.
Rebate of State Taxes and Levies shall be understood to comprise VAT on fuel used in transportation, captive power, farm sector, mandi tax, duty of electricity, stamp duty on export documents, embedded SGST paid on inputs such as pesticides, fertilizers etc. used in production of raw cotton, purchases from unregistered dealers, coal used in production of electricity and inputs for transport sector.
Rebate of Central Taxes and Levies shall be understood to comprise central excise duty on fuel used in transportation, embedded CGST paid on inputs such as pesticides, fertilizer etc. used in production of raw cotton, purchases from unregistered dealers, inputs for transport sector and embedded CGST and Compensation Cess on coal used in production of electricity.
Objective
To rebate all embedded State and Central Taxes and Levies on Apparel and Made-Ups with a view to enhance competitiveness of these sectors and also in reaction to the international pressure on export incentives which the US in particular has been very vocal and urging the discontinuation of export incentives like the MEIS on ground of violations as per WTO; the Rebate of State & Central Taxes and Levies (RoSCTL) Scheme has been introduced.
Rebate of State Taxes and Levies shall be understood to comprise VAT on fuel used in transportation, captive power, farm sector, mandi tax, duty of electricity, stamp duty on export documents, embedded SGST paid on inputs such as pesticides, fertilizers etc. used in production of raw cotton, purchases from unregistered dealers, coal used in production of electricity and inputs for transport sector.
Rebate of Central Taxes and Levies shall be understood to comprise central excise duty on fuel used in transportation, embedded CGST paid on inputs such as pesticides, fertilizer etc. used in production of raw cotton, purchases from unregistered dealers, inputs for transport sector and embedded CGST and Compensation Cess on coal used in production of electricity.
Eligible Categories
for RoSCTL Scheme
The rebate under RoSCTL are available to exporters of readymade garments and made-ups for now.
Present Scenario
The Scheme is currently eligible for exports of Made-Ups & Garments. However, this scheme will be extended to other export products in the future. ROSL Scheme are to be processed for Shipping Bills with Let Export Order (LEO) date up to 6th March, 2019 only. W.e.f. 07.03.2019, RoSCTL Scheme shall replace the Rebate of State Levies (RoSL) scheme.
The ROSCTL shall be implemented through a Merchandise Exports from India Scheme (MEIS) type Scrip System.
An exporter opting for this scheme shall make claim for rebate on exports at item-level. The scheme is in compliance with WTO guidelines.
RoSCTL and DBK
In accordance with the recognized international economic principle of zero rating of export products, it has been decided that the Central Government shall provide for rebate under RoSCTL Scheme at notified rates and value caps in the form of Duty Credit Scrips in addition to the Duty Drawback (DBK) Scheme. {Ministry of Textile : Notification No: 14/26/2016-IT Dt. 07.03.2019}
Ineligible Categories for RoSCTL Scheme
The rates of RoSCTL specified in the Schedules under Ministry of Textiles Notification No. 14/26/2016-IT (Vol.II) dated 8.3.2019 shall not be applicable to export of a commodity or product if such commodity or product is:
Manufactured or exported in andischarge of export obligation against an Advce Authorisation or Duty Free Import Authorisation
issued under the Duty Exemption Scheme of the relevant Foreign Trade Policy: Provided that where exports are made against Special Advance Authorisation issued under Paragraph 4.04A of the Foreign Trade Policy 2015-20 in discharge of export obligations in terms of Notification No. 45/2016-Customs, dated 13th August, 2016, the rates of RoSCTL specified in the said Schedule shall apply.
Manufactured or exported
availing the benefit of the Notification No. 32/1997-Customs dated 1st April, 1997. {Jobbing- export order goods imported for} {Ministry Textiles Notification No. 14/26/2016-IT Dt. 02.05.2019}
Manufactured or exported
by a unit licensed as hundred per cent Export Oriented Unit in terms of the provisions of the relevant Foreign Trade Policy;
Manufactured or exported
by any of the units situated in Free Trade Zones or Export Processing Zones or Special Economic Zones;
Manufactured partly or wholly in a Warehouse
under section 65 of the Customs Act, 1962 (52 of 1962);
Rebate Rates under RoSCTL Scheme
In a Ministry of Textiles notification dated 8th March 2019, the rates under the scheme were notified in four schedules.
Schedules 1 and 2 specify the Central and State Taxes and levies for apparel and made-ups. Schedules 3 and 4, on the other hand, give the Central and State Taxes and Levies applicable for Apparel Export when the Fabric (including interlining) has been imported duty-free under the Special Advance Authorisation Scheme.
Special Additional One-Time Ad-Hoc Incentive
It is further notified that, as decided by the Expenditure Finance Committee (EFC) in its meeting on 30.12.2019, a
special one-time additional ad-hoc incentive of upto 1% of FoB value will be provided for exports of apparel and
made-ups to offset the difference between RoSCTL and RoSL + MEIS@4%, from 7.3.2019 to 31.12.2019.
Recommendations of the EFC are as follows
a) The additional incentive under the scheme would be as per claims from the exporters and the total Adhoc incentive would not exceed Rs. 600 crore for the period mentioned above.
b) Under the scheme, incentive of upto 1% of FOB value for each line in a shipping bill will be provided for those exports of apparel and made-ups which may receive lesser benefits under RoSCTL as against RoSL+ MEIS.
c) MEIS stands withdrawn from 07.03.2019 (for Chapters 61, 62 and 63). Department of Commerce may take necessary measures accordingly. Claims already paid to the exporters under MEIS will be suitably adjusted against RoSCTL and recoveries made wherever due.
d) Steps will be taken for the validation of claims by DGFT and DoR for correct disbursal of benefits.
e) The ad-hoc incentive would be implemented in the form of scrips for which an outlay would need to be provided by Department of Revenue.
{Ministry Textiles Notification No. 14/26/2016-IT Dt. 14.01.2020}
Application under RoSCTL
- An Application for RoSCTL on exports will be filed online using digital signature on DGFT website with concerned RA in ANF 4R linking the relevant shipping bills with the Online Application by the Applicant.
- A maximum of 50 Shipping Bills can be attached in 1 Application.
- There is no need to link eBRC for applying RoSCTL.
- In the case of exports made from Non-EDI ports, a separate application has to be filed for each export. It cannot be clubbed with exports from EDI ports.
- In case of Non EDI shipping bills concerned RA shall verify the details entered by the exporter from the original shipping bills before grant of scrip.
- In the case of EDI exports from enabled ports, the port of registration will be the EDI port itself.
- Separate online applications for claims under RoSCTL for shipping bills with LEO date in the period 07.03.2019 to 31.12.2019 and with LEO date on or after 01.01.2020 shall be made.
- The excess/ undue claims paid to exporters under MEIS, for exports with LEO Date between 07.03.2019 to 31.12.2019, relating to apparel and made – ups (Chapter 61, 62 and 63) will be suitably adjusted against RoSCTL and recoveries made, wherever due.
- For Applications in the period 07.03.2019 to 31.12.2015, the DGFT online system shall electronically populate the entitlement per shipping bill including the additional ad-hoc incentive and reduce/ adjust MEIS wherever already granted.
Time Limit for Application
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Application have to be filed within 1 Year of date of uploading of S/Bill from ICEGATE to DGFT Server. After this period, NO application will be filed.
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For Shipping Bills will LEO date from 07.03.2019 to 31.12.2019, the last date for filing online claims will be 30.06.2020. The last date for filing online claims is amended to read as 31.12.2020 in place of 30.06.2020 vide DGFT Public Notice No. 67/2015-20 dt. 31.03.2020
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For Shipping Bills will LEO date on or after 01.01.2020, the last date for filing online applications will be within 1 year from the date of LEO.
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After these deadlines, no application can be filed and the shipping bills would be time barred. There is no provision for Late Cut under RoSCTL {DGFT Public Notice No. 83/2015-20 Dt. 29.03.2019}
Transferability
RoSCTL is freely transferable i.e. an exporter can transfer the scrip he obtained, to any other person.
Revalidation
Revalidation of RoSCTL shall not be permitted unless covered under Para 2.20(c) of HBP.
Utilisation
RoSCTL can be used for payment of:
(i) Basic Customs Duty and Additional Customs Duty specified under Sections 3 (1), 3 (3) and 3 (5) of the
Customs Tariff Act
(ii) Central Excise Duties on Domestic Procurement of Inputs or Goods
(iii) Fee as per Paragraph 3.18 of the FTP 2015 -20
RoSCTL cannot be used for payment of:
Any GST and related Cess on Imports as well as Domestic Procurements
Validity of RoSCTL
The scrip so rewarded under this scheme shall be valid for a period of 24 months from the date of its issue. The scrip should be valid on the date of actual debit.
Validity of RoSCTL
The scrip so rewarded under this scheme shall be valid for a period of 24 months from the date of its issue. The scrip should be valid on the date of actual debit.
Maintenance of Records
As an exporter, if you avail of RoSCTL scrips, you must retain the shipping bills and other documents related to the export for 3 years from the date of issue of the scrips. The concerned authorities may demand to take a look at these documents, and failing to produce them could lead to you having to repay the scrip value with interest and/or penalty under the Foreign Trade (Development and Regulation) (FTDR) Act.
Risk Management System (RMS)
After system based approval of the final entitlement under RoSCTL, the scrip will be issued by Ras, in a paper mode. However, RAs shall scrutinize 2% of issued RoSCTL applications, under a Risk Management System (RMS), every week. The RMS cases will be randomly generated by the DGFT system online.
Precautions under RoSCTL Scheme
Since realisation of Foreign Currency is of utmost importance for getting the rebate under RoSCTL, it’s important for every exporter benefiting from RoSCTL to retain the proof of receipt-of Export proceeds. The Jurisdictional RA can challenge the value of your scrips through an electronic examination of records. If an excessive rebate is found to be claimed, you will be required to pay back the excess rebate to the DGFT, along with interest @15% per annum from the date of receipt of scrip to the repayment date. Additionally, you may be penalized for not declaring the excess receipt and for fraudulent practices. Legal action may also be initiated under the FTDR Act in case of non-repayment or non-reply to the regional authority within 30 days of receipt of the notice.
Maintenance of Records
As an exporter, if you avail of RoSCTL scrips, you must retain the shipping bills and other documents related to the export for 3 years from the date of issue of the scrips. The concerned authorities may demand to take a look at these documents, and failing to produce them could lead to you having to repay the scrip value with interest and/or penalty under the Foreign Trade (Development and Regulation) (FTDR) Act.
Risk Management System (RMS)
After system based approval of the final entitlement under RoSCTL, the scrip will be issued by Ras, in a paper mode. However, RAs shall scrutinize 2% of issued RoSCTL applications, under a Risk Management System (RMS), every week. The RMS cases will be randomly generated by the DGFT system online.
Precautions under RoSCTL Scheme
Since realisation of Foreign Currency is of utmost importance for getting the rebate under RoSCTL, it’s important for every exporter benefiting from RoSCTL to retain the proof of receipt-of Export proceeds. The Jurisdictional RA can challenge the value of your scrips through an electronic examination of records. If an excessive rebate is found to be claimed, you will be required to pay back the excess rebate to the DGFT, along with interest @15% per annum from the date of receipt of scrip to the repayment date. Additionally, you may be penalized for not declaring the excess receipt and for fraudulent practices. Legal action may also be initiated under the FTDR Act in case of non-repayment or non-reply to the regional authority within 30 days of receipt of the notice.