Textile sector hails continuation of taxes, levies rebate scheme

The textile and clothing industry is confident of growth in exports of apparels and made ups as the Union government announced on Wednesday continuation of the Rebate of State and Central taxes and Levies (RoSCTL) scheme till the end of March, 2024.

Cotton Textiles Export Promotion Council chairman Manoj Patodia said the extension of the RoSCTL scheme is a positive development that will improve the competitiveness of made ups articles in the export markets. In the textile sector, overseas buyers place orders and exporters have to chalk out their activities well in advance and, therefore, it is important that the policy regime regarding export of textile products should be stable. The exporters can now take a long term perspective while negotiating export orders.

A. Sakthivel, chairman of Apparel Export Promotion Council, said the Scheme will refund all embedded taxes and make Indian apparel and made up products globally competitive. “The scheme will go a long way in bringing back positive sentiments and helping the Indian textile value chain attain $100 billion annual exports in next three years,” he said. The scheme will help check the declining trend witnessed in apparel exports. India’s apparel exports fell 20.8 % in one year, from $15,509 million in 2019-20 to $12,289 million in 2020-21.

T. Rajkumar, chairman of Confederation of Indian Textile Industry, said the textile products that are exported includes the embedded taxes/ levies to the tune of 5 % to 6 % and these are currently not rebated under any other mechanism. The RoSCTL will help exporters get some of the cost reimbursed and reduce their financial burden.

Chairman of Southern India Mills’ Association Ashwin Chandran said the the textile and clothing industry had been seeking extension of the RoSCTL scheme to mitigate the crisis created by the pandemic. The industry struggled to commit orders to buyers in the absence of RoSCTL benefit and has been facing stress during the last couple of months. The announcement on Wednesday has given confidence to exporters and created a level-playing field to increase the exports and create new jobs.

According to Raja. M. Shanmugham, president of Tiruppur Exporters’ Association, the scheme will benefit exporters in the long term too to work out the costing as the exporters usually take up orders four to six months in advance.

The “timely intervention” will give thrust to apparel and made up exports as international brands, especially those in the US, are looking at India as a credible alternative sourcing destination to India, said Prabhu Dhamodharan, convenor of Indian Texpreners’ Federation.

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