Apparel exports up 31.7% in Apr, on RoSL Scheme support

The Dollar Business Bureau

The apparel exports from India recorded a momentous rise of 31.7% in April this year as compared to same month a year ago. In a statement to the media Apparel Export Promotion Council (AEPC) said “India’s apparel exports registered momentous growth of 31.7% in April 2017 compared to same period last year.”

According to the data, the apparel sector has been witnessing a double-digit growth, after the introduction of disbursement of RoSL (Rebate of State Levies) scheme.

During March-April, this year, the garment exporters were able to enhance their production capacity by about 30% for achieving such growth and employed around 5% more workers during this same period, the statement said.

AEPC Chairman Ashok G Rajani, while attributing this growth to RoSL scheme, said, “The big jump in apparel exports is the result of recently implemented incentive called RoSL on Export of Garments, as it helped the industry to increase the production at very competitive rates for a larger share of global markets.”

AEPC wants that RoSL scheme to stay even after the implementation of new regime of Goods and Services Tax (GST) and also urged the Government to continue the Scheme in GST era for sustained growth.

“It is important that ROSL is continued even in GST era to ensure sustained growth momentum. We made a presentation to Finance Minister last week to continue RoSL in current form under GST regime. We have also rolled out a study of more than 1000 exporters on the key contributors to exports and we will be sharing the results shortly,” he said.

“Around 80% beneficiaries of RoSL scheme are exporters with a turnover of less than Rs.10 crores (SMEs) per year,” he added.

RoSL scheme is in tune 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 the way of drawback schemes. With GST being operational from July 1, any dilution in the RoSL scheme will hit the apparel export sector badly impacting the job growth.

“India is at the cusp of major tax reforms and move like GST is a milestone. However, to provide seamless business environment, policymakers have to be flexible and address the collective wisdom of industry for a robust economic system, specifically when the industry provides jobs to 129 lakh workers,” Rajani said.

Some additional details of the RoSL scheme:

• The scheme is meant for export of garments eligible for the All Industry Rate of Drawback. Applicable to  exports with Let Export Order dated from 20 Sept. 2016 onwards.
• The rebate is available either as the general rate of rebate (schedule) or the rates of rebate applicable for rebate when the fabric (including inter-linking) has been imported duty free under Special Advance Authorisation (schedule II). The rebates are not applicable on exports made under the general Advance Authorisation Scheme with claim of duty drawback under Rule 6 of the Drawback Rules.
• In RoSL scheme, the rebate of state levies is understood to comprise state VAT/CST in inputs, including packaging, fuel, duty on electricity generation, and duties and ‘charges’ on purchase of grid power as accumulated through stages of production from yarn to finished garments. The RoSL scheme is not mandatory for an exporter.