With this decision, the administration also abandoned an earlier proposal to replace the RoSCTL with the Remission of Duties and Taxes on Exported Products (RoDTEP), which is set to go into effect soon.
The government said on Friday that it will prolong the validity of a major tax rebate scheme for garment and made-up exporters until March 2024, easing liquidity flow to the important labor-intensive sector in the aftermath of the epidemic.
The government has extended the exporter tax refund plan for an additional period of time. The move will help to boost garment exports, which have recently slowed. Exporters are eligible for scripts of up to 6% of the freight-on-board value of their products, whereas made-up exporters are entitled to a maximum of 8.2%. The finance and textile ministries will create a framework for evaluating rates on a regular basis.
The move will help the country realise the country’s merchandise export target of $400 billion for FY22. Exporters can use this scrip to pay basic customs duty for the import of equipment, machinery or any other input. The scheme will promote start-ups and entrepreneurs to start exporting their products. It will rejuvenate the textiles sector and, in three years, the Indian textile value chain can attain annual exports of $100 billion.