The Apparel Export Promotion Council (AEPC), the official body of apparel exporters in India, has sought continuation of the ‘Rebate of State Levies (ROSL) on Export of Garments’ scheme in its current form under the Goods and Services Tax (GST) regime. The GST Council will decide on tax rates for the textile and garment sector at its meeting on June three.
The data of India’s apparel exports shows that after the commencement of disbursement of ROSL, the apparel sector has been registering double digit growth, AEPC said. India’s apparel export registered momentous growth of 31.7 per cent in April 2017 compared to same period last year. During March-April, 2017, Indian garment exporters were able to increase production by around 30 per cent for achieving this growth and employed at least 5 per cent more workers during the same period.
“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. It is important that ROSL is continued even in GST era to ensure sustained growth momentum,” AEPC chairman Ashok G Rajani said.
“80 per cent beneficiaries of ROSL scheme are exporters with a turnover of less than 10 crore (SMEs) per year. 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 1,000 exporters on the key contributors to exports and we will be sharing the results shortly,” 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, 2017, any dilution in the ROSL scheme will hit the apparel export sector badly impacting the job growth, Rajani in a statementsaid.
“India is at the cusp of major tax reform 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, especially when the industry provides jobs to 129 lakh workers,” he concluded.
Other textile and apparel bodies like The Cotton Textiles Export Promotion Council (Texprocil) and Tirupur Exporters’ Association (TEA) have also urged the centre to continue ROSL benefit under the GST regime.
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