Trading has been one of the most important processes since earlier times. Trading has been possible only because of imports and exports. In the modern sense, we are able to buy furniture, fruits, vegetables, clothes, and many more things only because of imports and exports. Goods bought from the other countries are known as imports. On the other hand, goods sent to the other country are known as exports. Our country from which we are sending the goods is a domestic country, and the country from which we receive the goods is known as a foreign country. The RoSCTL scheme came as an export incentive to provide a rebate on all the state and central taxes on garments. In this article, we will learn how to apply the RoSCTL scheme and RoSCTL application.
Did you know?
Exporters of apparel and made-up garments are currently eligible for the RoSCTL Scheme, under which the exporters will be repaid the State Taxes and Levies, Central Taxes and Levies as duty credits issued by the DGFT for all exports made on or after 1 April 2019.
RoSCTL Scheme
RoSCTL scheme was introduced in March 2019 by the ministry of textiles. RoSCTL rate list and notification were also released with it. RoSCTL is a rebate that comes under the category of Central and State taxes which was announced to promote the imports, especially in the textile sector, and it will soon expand to other sectors as well. The guidelines of the RoSCTL scheme have been revised by the government of India, and they have become much easier now because of ANF-4R Form (Aayat Niryat Form). The streamlined procedures are contained in this form to apply the RoSCTL scheme online. The RoSCTL scheme has replaced the ROSCL Scheme. ROSCL was an incentive scheme in which customs used to deposit the rebate amount directly in the bank account of the exporter. The RoSCTL schemes are notified in Schedules 1,2,3, and 4.
Background
The RoSCTL scheme was introduced for better compliance with the guidelines of the World Trade Organization. The old ROSCL scheme was discontinued after the introduction of the RoSCTL scheme. At present, the RoSCTL scheme is applicable only to the exporters of apparel and made-ups. For all the exports that took place after 1st April 2019, the exporters will be reimbursed the amount of central taxes, state taxes and levies, and duty credit levies. The exports which took place between 6th March 2019 and 31st March 2019 and the exports that took place before 6th March will fall under the category of ROSCL schemes. Different rebates will be applicable on such exports.
Also Read: Know About Export Oriented Units (EOU) Scheme
Procedure to Apply for RoSCTL Scheme
The latest notification released by the government states the procedure that must be followed in order to be eligible for a RoSCTL license. The steps to apply for the RoSCTL scheme are –
1. Visit the official website of DGFT. Fill out the application form to apply for RoSCTL online , taking the help of the revised ANR-4R form.
2. You must also attach the details of all your relevant shipping bills. It must be noted that a maximum of 50 shilling bills are allowed to be linked with a single application form.
The cases when the exporter needs to fill separate online RSCTL forms are –
• The exports that took place between 7th March 2019 and 31st March 2019.
• The exports whose let exports date was on or after 1st January 2019.
3. In the case of the split scrips facility, the provisions of para 3.09 of HBP are applicable.
4. The regional jurisdiction authority must be chosen with regards to para 3.06(b) of HBP. The government has removed the restriction of maintaining the same jurisdiction regional authority for all the applications in a single financial year. These removed provisions were contained in para 3.06(a) of HBP.
5. Now select the port of registration of your RoSCTL scrips. The port is different for the shipments that happen through electronic data interchange (EDI) and the non-electronic data (non-EDI) interchange ports. The following points must be kept in mind related to the selection of ports –
• The shipments from EDI ports and non-EDI ports must be disclosed in separate RoSCTL application forms.
• In the case of EDI-enabled ports, at the time of choosing the port of registration, the applicant can choose any port from where the export was made.
• In the case of non-EDI enabled ports, there must be a separate registration for all the non-EDI ports.
6. The online system of DGFT will automatically populate the entitlement electronically for every shipping bill that is applied between 7th March 2019 and 31st December 2019. It also includes the additional incentives that are already granted.
7. Your regional authority will issue the electronic scrips, ie. In online mode, when the final entitlement is approved by the system.
8. The registration of duty credit scrips needs to be done at the port that is mentioned in the script. These scrips can be used at any port after the registration for import.
9. The validity period of duty credit scrips is two years from the date of issue. You must confirm that it is valid when the debit of duty is made.
Recovery Mechanism
The conditions for the recovery mechanism of the RoSCTL scheme are –
• Every exporter must maintain the record of all the shipping documents and the other required documents till three years from the date of issue of scrip. This will help in post-issue scrutiny and recovery purpose.
• The exporter must refund the excess amount with interest if more than the eligible amount was issued and noted by the regional authority.
Revised ANF 4R Form
Following are the changes that were applied to the revised ANR form which was used for the online RSCTL application –
Guidelines for Applicants
• Applicants must read the declaration made in form ANF 4R
• There must be separate online RSCTL applications for different periods based on let export dates.
• Auto calculation is done with adjustments for MEIS.
Declaration
• New declaration is made that states adjustments for MEIS benefits
• New declaration for a refund of excess RoSCTL amount with interest. It should be made in cash.
Rebates Under the RoSCTL Scheme
The RoSCTL scheme offers a rebate of both, State and Central taxes. The list of state taxes and levies that will be refunded under the RoSCTL scheme are –
• VAT on transportation fuel
• Mandi Tax
• Captive Tax
• Stamp Duty on all the export documents
• Electricity Duty
• SGST levied on inputs of production of raw cottons such as pesticides and fertilizers
• The material used in the transportation sector
• Any other product purchases from the unregistered suppliers
• Coal is used for the production processes.
The list of Central taxes and levies that will be refunded under the RoSCTL scheme are –
• Central Excise Duty on fuel used in transportation
• Other material purchased from the unregistered suppliers
• Embedded CGST paid on inputs of fertilizers and pesticides
• Compensation cess and CGST on coal used in the production of electricity
• Inputs for the transport sector
RoSCTL Scheme Rates
The rates of the RoSCTL scheme are notified in schedules 1,2,3, and 4. The RoSCTL scheme rates are as follows –
• Schedule 1 and 2 – The Central and State excise levy rates for made-ups and apparel.
• Schedule 3 and 4 – The central and state excise levy rates for made-ups and apparel when the duty-free fabric is imported.
Also Read: What Is the RoDTEP Scheme and How Is It Beneficial?
Documents Required to Apply for RoSCTL Scheme Online
To apply for the RoSCTL scheme online, you must have the following documents –
• DGFT Digital Signature
• Shipping Bill Copies
• Valid registration cum member certificate
• Any other documents as may be required
Conclusion
Imports and exports have become a crucial part of the growth of a nation since no country can be 100% self-sufficient. Import and export of goods or services are one of the easiest ways to enter the global market. They also offer a large number of employment opportunities. Compared to the other methods of earning, it requires less investment in terms of time and money. It is also less risky compared to the other international business options.
The RoSCTL scheme offers a rebate to the exporters of readymade garments. The scheme was applicable with effect from 1st April 2019. To claim the rebate of the RoSCTL scheme, filling out form ANF 4R (revised) is mandatory. You can attach upto 50 shipping bills in one application. It helps the exporters of readymade garments and made-ups to cut down their high logistics cost and other costs so that they can compete globally.
Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.
