Moving RoSCTL, advance authorisation schemes to revenue dept may help boost slipping exports
The government is contemplating a revamp of the Department of Commerce and certain incentive schemes that fall under it, as it aims at administrative easing to boost exports and domestic manufacturing.
The commerce and industry ministry and finance ministry are discussing the idea of bringing the new exports incentives scheme — Rebate of State and Central Taxes and Levies (RoSCTL) — as well as the existing Advance Authorisation Scheme, within the remit of the drawback committee under the revenue department, said people aware of the matter.
At present, the Advance Authorisation Scheme is with the Directorate General of Foreign Trade (DGFT), an arm of the commerce and industry ministry. RoSCTL is a replacement of the DGFT’s Merchandise Exports from India Scheme (MEIS), which was challenged by the US last year for violating global trade rules. It will allow reimbursement of duties on export inputs and indirect taxes through freely transferrable scrips.
“There is a feeling that making the revenue department solely responsible for these schemes will help in ease of doing business and reduce transaction time for exporters,” said an official, who did not wish to be identified.
The restructuring plan comes in the wake of 0.37% decline in outward shipments in April-July to $107.41 billion, while imports contracted 3.63% to $166.8 billion. Separately, the government has also discussed putting the external affairs ministry in charge of India’s trade negotiations, which at present is the core function of the commerce department. However, BiswajitDhar, professor, Jawaharlal Nehru University, said, “Any such move will only pit ministries against each other because while the finance ministry looks at revenue foregone, export targets and exporters’ concerns are the commerce department’s responsibility.”
Restructuring DGFT was on the agenda earlier as well, and the government had engaged private consultants to conduct an in-depth analysis. DGFT, which is involved in regulation and promotion of foreign trade, was known as the Chief Controller of Imports and Exports before 1991.
