ROSCTL Scheme
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ROSCTL Scheme: Eligibility, Benefits, and Application Procedure
Rebate of State and Central Taxes and Levies on Export of garments and Made-ups(ROSCTL) was introduced to help local textile and apparel-related SMEs. Textile exporters can claim refunds on central, state, and local levies with the help of this scheme. The rebate in this scheme shall be in the form of duty credit scrips.
Table of Content
- ROSCTL overview
- What is the RoSCTL Scheme?
- Benefits and Eligibility for ROSCTL Scheme
- How to apply for the ROSCTL scheme
- Documents required for the ROSCTL scheme
- What is duty credit scrip?
- How ROSCTL scrips are transferred?
- Restrictions on rebate under the RoSCTL Scheme
- Conclusion
- Frequently Asked Questions (FAQs)
What is the RoSCTL Scheme?
The Ministry of Textiles introduced the RoSCTL scheme for the export of apparel and textiles to enhance competitiveness. The RoSCTL scheme was introduced in March 2019, to support the textile sector during the pandemic, which was later extended until 2024 with the help of the Apparel Export Promotion Council (AEPC). This scheme replaced the Rebate of State Levies (ROSL) and the Merchandise Exports from India Scheme (MEIS). This scheme implemented by the Department of Revenue, compensates your business for State Taxes, Central Taxes, and levies through sellable and transferable duty credit scrips.
Benefits and Eligibility for RoSCTL Scheme
The RoSCTL scheme gives a monetary incentive to exporters and makes their manufactured products more competitive within the global market. By refunding the taxes and levies incurred by exporters, the scheme reduces their manufacturing costs, which leads to lower prices for the end consumer. This makes Indian products more appealing within the worldwide market and increases their demand.
The RoSCTL scheme is for all the Indian exporters who manufacture and export certain products. The products secured under the scheme incorporate textile and apparel, leather and footwear, handicraft, engineering, and marine products. The scheme applies to products manufactured in special economic zones(SEZs) and sold within the domestic market.
Documents Required for RoSCTL Scheme
The following are the documents required to apply for the RoSCTL scheme
• Digital Signature Certificate
• Shipping bills
• DGFT registration
• Importer Exporter Code (IEC)
• Valid registration cum member certificate (RCMC)
How to Apply for the ROSCTL Scheme?
Follow the steps to apply for the RoSCTL:
1.Filling the ANF 4-R Form
Fill out the ANF 4-R form by visiting the DGFT website and make sure while filling out the form, to keep 50 shipping bills with you that can be used in a single application.
2.Registering for RoSCTL Scrips
Once the application and bills are submitted, you can register for ROSCTL scripts. Make sure to follow the given guidelines:
• The port registration for Electronic Data Interchange (EDI) enabled port needs to be chosen from any of the ports from where the export has been conducted.
• The shipment from EDI ports and non-EDI ports must have a separate application.
3.Entitlement Approval
Once the application is submitted, DGFT’s system will electronically approve the entitlement
per shipping bill and also include additional ad-hoc incentives.
4.Scrip Issuance
After the final entitlement is approved, the scrips will be issued by the Regional Authority (RA), which will issue the scrips electronically
What is duty credit scrip?
Duty credit scrip is provided as a rebate under the ROSCTL scheme. These scrips are generated electronically on the customs system, which shall be used for payments of basic customs duty on the import of goods, which are also transferable. The duty credits available in the e-scrip shall be transferred at a time for the entire amount in the said e-scrip to another person and transfer of duty credit in part will not be permitted.
This e-scrip is valid for one year from the date of its creation, and that shall not change on account of the transfer of the e-scrip. All exporters of Apparel, garments, and made-ups manufactured in India are eligible for this scheme, except for those entities, and IECs which are listed in the Denied Entity of the Directorate General of Foreign Trade (DGFT).
How ROSCTL scrips are transferred?
The duty credit in e-scrips shall be allowed to be transferred within the customs automated system ledger of a person to the ledger of another person who has an Importer-Exporter Code number issued in terms of the Foreign Trade (Development and Regulation) Act, 1922. Any user who has an e-scrip account can transfer a scrip to another user. The user to whom the scrip is transferred needs to have a valid e-scrip account.
Follow the given steps for scrip transfer:
1.Accessing the Scrip Transfer Tab
Visit the E-scrip Home page, and select the Scrip Transfer tab to transfer the particular scrip to any other user.
2.Selecting the Scheme and Scrip
It is compulsory to select a scheme, RoSCTL or RODTEP to transfer the scrips. The user can select the scrip to be transferred from the generated scrips. A list of generated scrips will be available in the drop-down menu along with the Scrip Available option
3.Entering the Recipient’s Details
After the scrip selection, the user can view the scrip amount and enter the user’s IEC to which the scrip is to be transferred. A textbox alongside the Transfer To option will be available where the details of the IEC holder to whom the user wants to transfer the scrips can be entered.
4.Verifying the Transfer with OTP
OTP is sent to the user who has initiated the transfer to their registered mobile number and
email ID. A 15-minute window is given to enter the OTP by the user to transfer the scrip successfully.
5.Cancelling the Transfer Request
After the successful transfer of the request, the scrip will be viewed in the grid on the same page, where the user who initiated the scrip transfer request has the option to cancel the request by clicking the cancel button
Rebates Under the RoSCTL Scheme
The General rebates under the ROSCTL Scheme are provided below:
State-level taxes and levies claim
Captive power
Mandi tax
Stamp duty on export documents
Purchase from unregistered dealers
Stamp duty on export documents
Vat on fuel in transportation
SGST on inputs, such as pesticides and fertilizers
The coal used for production
Material utilized in the transport sector
Duty on electricity
Central-level taxes and levies claim
Embedded CGST on inputs, such as pesticides and fertilizers
Purchase from unregistered dealers
CGST and Compensations Cess on coal used in the production of electricity
Input for the transport sector
Central excise duty on fuel used in transportation
Restrictions on Rebate Under the RoSCTL Scheme
List of goods that are not eligible under the RoSCTL scheme:
• Goods which are subject to minimum export price or export duty.
• Deemed exports under Foreign Trade Policy.
• The export of imported goods is covered under paragraph 2.46 of the Foreign Trade Policy.
• Trans-shipment through the country.
•Goods that are restricted for export under Schedule-2 of Export Policy in ITC-HS.
• Importer Exporter Codes (IECs) are listed in the Denied Entry List by the Directorate General of Foreign Trade (DGFT).
• Goods manufactured partly or entirely in a warehouse under section 65 of the Customs Act, 1962.
•Goods produced or supplied by the units in the Domestic Tariff Area to units in the special economic zone/Free trade warehousing Zone.
• Goods that have been used after manufacture or reconditioned/upgraded/worn/used clothes.
• Products of which the duty credit claim isn’t recorded in a shipping bill or bill of export within the customs automated system.
• Products manufactured or exported from a business licensed as a hundred percent export arranged under the provision of the Foreign Trade Policy.
• Goods manufactured or exported against Advance Authorisation or Duty-Free Import Authorisation under the Duty Exemption Scheme of the relevant Foreign Trade Policy.
•Goods manufactured or exported by unit located in the Special Economic Zone, Export Processing Zone, and Warehousing Zone.
Conclusion
In conclusion, the RoSCTL scheme has helped Indian exporters compete globally, by offering tax rebates, increased profit margins, and accessibility to markets. The RoSCTL scheme played a pivotal role in fortifying India’s textile and apparel sector, helping in economic growth, and export growth from India. Tempting it may sound but the exporters need to take precautions like the exporters who benefit from the RoSCTL scheme need to retain the proof of receipt of sale proceeds. If an exporter is found to claim the excessive rebate, they will be required to pay the excess rebate to the DGFT, with an interest of 15% per annum from the receipt of the scrip to the payment date. Professional Utilities has a leading consult and experts for the RoSCTL scheme, book a consultation with us to know more.
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Frequently Asked Questions (FAQs)
ROSCTL license is a government scheme designed for exporters in the textile and apparel sectors, in which they get rebates on taxes and levies incurred during the production process.
Under the RoSCL scheme, no benefits were given on central tax and levies, whereas the RoSCTL scheme allows exporters to receive rebates on both state and central tax and levies.
All exporters in textile, apparel, and made-ups that are manufactured in India are eligible to claim the benefit under this scheme but those entities/IECs under the Denied Entity List of the DGFT are not eligible.
It is an application form used for applying for the Rebate of State and Central Tax and Levies (RoSCTL) scheme, as notified in para 4.95 and 4.96 of the Handbook of Procedures 2015-20.