The government has initiated the process of operationalising the Rs 5,500-crore Rebate of State Levies (ROSL) scheme from September 20, 2016. The main objective of the scheme is to provide for reduction of state levies in addition to the duty drawback scheme, through the scheme for ROSL on export of garments on an average basis only. The scheme is in line with the recognised economic principle of 'zero rating' of export products and in recognition of the fact that at present only central levies are rebated by way of the drawback scheme.
Under this scheme, the revenue department will compensate exporters for state levies. Currently, the exporters get compensated for duty drawback during manufacturing of products for exports. The new incentives, which include enhanced duty drawback coverage with refund of state levies not being refunded so far, additional funding under the Technology Upgradation Fund Scheme (TUFS) and additional contribution towards the Employee’s Provident Fund (EPF) by the government, will help Indian exporters fight competition from countries such as Bangladesh.
The rebate will be disbursed from budgetary allocation of Ministry of Textiles using the Customs EDI System. The scheme also aims to boost India’s garment exports thereby facilitating augmenting of investment and creation of more employment in the garment sector.