Cabinet approves continuation of Scheme for Rebate of State and Central Taxes and Levies for export of Apparel/ Garments

The Union Cabinet chaired by Prime Minister Shri Narendra Modi approved the continuation of the Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) for the export of Apparel/Garments and Made up upto 31st March 2026.

The continuation of the Scheme for the proposed period of two (2) years will provide a stable policy regime, which is critical for long-term trade planning, particularly in the textiles sector, where orders can be placed ahead of time for delivery later.

The maintenance of RoSCTL will maintain predictability and stability in the policy regime, help eliminate the burden of taxes and levies, and offer a level playing field based on the idea that “goods are exported and not domestic taxes”

The Union Cabinet approved the scheme until March 31, 2020, and further agreement was provided to extend RoSCTL until March 31, 2024. The current extension, which runs until March 31, 2026, helps to improve the export competitiveness of the garment and made-up sectors. It makes apparel/garments and made-ups products more cost-effective and follows the zero-rated export policy.

Other textile items (except Chapters 61, 62, and 63) not covered by the RoSCTL are eligible to receive advantages under the RoDTEP with other products.

The scheme’s goal is to compensate for state and central taxes and levies, as well as the Duty Drawback Scheme, on the export of apparel/garments and made-ups through rebates. It is based on the internationally accepted premise that taxes and levies should not be exported in order to provide a fair playing field in the worldwide market for exports.

As a result, not only indirect taxes on inputs will be rebated or repaid, but so will other unrefunded State and Central taxes and levies.

Rebate of State Taxes and Levies includes VAT on transport fuel, captive power, farm sector, mandi tax, electricity duty, stamp duty on export documents, embedded SGST paid on inputs such as pesticides, fertilisers, etc. used in raw cotton production, purchases from unregistered dealers, coal used in electricity production and inputs for the transport sector.

Central Taxes and Levies Rebate includes central excise duty on transportation fuel, embedded CGST paid on inputs such as pesticides, fertiliser, etc. used in raw cotton production, purchases from unregistered dealers, inputs for the transport sector and embedded CGST and Compensation Cess on coal used in electricity production.

RoSCTL has been an important policy measure and has helped in enhancing the competitiveness of Indian exports of apparel and made-ups which are value-added and labour-intensive segments of the Textile Value Chain. Continuation of the Scheme for a further duration of two (2) years will provide a stable policy regime which is essential for long-term trade planning, more so in the textiles sector where orders can be placed in advance for long-term delivery.