Ministry of Textiles

02.05.2019

Civil

Scheme for Rebate of State and Central Taxes and Levies

MANU/TEXT/0010/2019

In pursuance of the decision of the Government of India to rebate all embedded State and Central Taxes and Levies on garments and made-ups, the Ministry of Textiles has notified the scheme for Rebate of State and Central Taxes and Levies (RoSCTL) on export of garments and made-ups vide notification dated 07.03.2019.

2. In continuation of the aforesaid notification, nature of rebate, mechanism of issue of scrips, over-claim/ claim based on mis-declaration and procedure for recovery under RoSCTL are hereby notified as follows:-

(a) Nature of Rebate

Scrips shall be granted under the Scheme for Rebate of State and Central Taxes and Levies. The Scrips and goods imported/ domestically procured against them shall be freely transferable. The Scrips can be used for:

(i) Payment of Basic Customs Duty and Additional Customs Duty specified under sections 3 (1), 3 (3) and 3 (5) of the Customs Tariff Act, 1975 for import of inputs or goods, including capital goods, as per DoR Notification, except items listed in Appendix 3A of FTP 2015-2020.

(ii) Payment of Central excise duties on domestic procurement of inputs or goods.

(b) Mechanism of Issue of Scrips under the RoSCTL

(i) The Director General of Foreign Trade will notify the procedure under which exporters can apply for the rebate under the scheme, and the Department of Revenue will notify the procedure for utilization of the scrips.

(ii) An exporter has to make a conscious choice to opt for ROSCTL scheme by making claim for rebate in acceptance of the scheme's terms and conditions while declaring the relevant scheme code for RoSCTL at the time of filing of the shipping bills. Such filing of shipping bills would be the exporter's self-declaration that he is eligible for the rate and rebate in as much as exporter has not claimed and shall not claim the credit/ rebate/ refund/ reimbursement of the specific taxes that comprise the rebate of State levies and Central Levies under any other mechanism.

(c) Over-claim/ claim based on mis-declaration and procedure for recovery

(i) The rebate allowed is subject to the receipt of sale proceeds within time allowed under the Foreign Exchange Management Act, 1999 failing which such rebate shall be deemed never to have been allowed. Action under the FT (D&R) Act may be taken by the Regional Authorities for recovery of erroneous or excess paid RoSCTL. Further, the exporter is required to return any over-payment of rebate issued through the scrips arising from miscalculation. Where there is repayment, recovery or return, interest shall also be paid by the exporter at the rate of fifteen per cent per annum calculated from the date of debit of the scrip till the date of repayment, recovery or return along with penalty, if imposed under an Adjudication order. Unutilized scrip under RoSCTL would be surrendered with no interest, however, a penalty may be imposed in case of mis-declaration and fraudulent practice under the provisions of FT(D&R) Act.

(ii) In case a recovery is due, DGFT or any officer designated by the DGFT shall issue a letter to the exporter and request the exporter to deposit the full sum (principal plus interest) within 30 days in the relevant account head of Customs. In case of non-compliance, action under the FT(D&R) Act would be initiated and a penalty might be imposed along with suitable action to recover duty plus interest.

(d) Residual issues related to the Scheme arising subsequently shall be considered by the Inter Ministerial Committee, whose decisions would be binding.

(e) 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 -

(i) Manufactured partly or wholly in a warehouse under section 65 of the Customs Act, 1962 (52 of 1962);

(ii) Manufactured or exported in discharge of export obligation against an Advance 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.

(iii) 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;

(iv) Manufactured or exported by any of the units situated in Free Trade Zones or Export Processing Zones or Special Economic Zones;

(v) Manufactured or exported availing the benefit of the Notification No. 32/1997-Customs dated 1st April, 1997.

Tags : Scheme Rebate Levies

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