Exporters no longer have to wait to get their dues for taxes as the government is set to notify the new duty refund scheme this week. This scheme will replace the World Trade Organization (WTO) non-compliant incentives.
BVR Subrahmanyam, the commerce secretary, had said the scheme will be implemented. However, there is some paperwork yet to be completed after the commerce and finance ministries agreed to widen the scope of the scheme to cover all products, which also required higher budgetary allocation. The two ministries had earlier agreed to increase the allocation from the originally allocated Rs 13,000 crore to Rs 17,000 crore.
As such the government had last week notified the Rebate of State and Central Taxes and Levies (RoSCTL) scheme, a similar mechanism, to allow textile exporters to get a rebate on central and state taxes till March 2024. A Sakthivel, chairman of the Apparel Export Promotion Council (AEPC), told the Financial Express that the move will help the country realize the lofty merchandise export target of $400 billion for FY22. “The decision adds to the stability of the export policy of textiles. 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.”
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According to industry estimates, the government owes about Rs 8,000 crore to exporters in unpaid RoDTEP bills with another Rs 3,500-4,000 crore arrears on account of RoSCTL. Moreover, Rs 16,000 crore of payments from the now defunct Merchandise Exports from India Scheme (MEIS) are due for April-December 2020. As a result, exporters are demanding payments of close to Rs 28,000 crore just from these three schemes.
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