New Export Incentive Scheme - RoSCTL Replaces Current Scheme - MEIS
RoSCTL has replaced the current scheme MEIS as the latter stands non complaint under WTO export incentive rules. MEIS was challenged by the challenged by the US last year in WTO.
As per WTO’s guidelines, a country cannot offer export subsidies if its per capita GNI has crossed $1,000 for three consecutive years. In the notice to India in 2017, WTO pointed out that the country’s GNI in 2013 was $1,051, $1,100 in 2014 and $1,178 in 2015 respectively. RoSCTL was then introduced to take place of current system – MEIS.
The Rebate of State and Central Taxes and Levies (RoSCTL) scheme, which at present is available on export of garments and made-ups, will now be extended to all exports in a phased manner. The Scheme will allow reimbursement of duties on export inputs and indirect taxes through freely transferrable scrips.
As per notification issued to the trade dated on 29th March 2019:
1) All exports in the current financial year i.e. post 1.4.2019, DGFT will issue scrips under the new RoSCTL Scheme.
2) The Department of Revenue will also approve and provide rebates as per the new scheme for all exports in between 7.3.2019 – 31.3.2019
“Records Maintenance” under RoSCTL:
1) Exporters must maintain a record of shipping bills and other documents upto three years from the scrip issuance date. The Licensing Authority – Registration Authority (RA) or any other agency can conduct a check any time within this period.
2) Rebate is issued post sales & realization of foreign currency within the time frame allotted under the Foreign Exchange Management Act of 1999. If sale proceeds receipt is not furnished, the RA will revoke permission for the rebate.
3) RA can conduct audit of electronic scrips issued to ensure that the exporter is not over / under issued these scrips.
The RoSCTL rebates the embedded taxes include central excise duty on fuel used in transportation, embedded CGST paid on inputs, purchases from unregistered dealers, inputs for transport sector and embedded CGST and compensation cess on coal used in the production of electricity. While the MEIS will be withdrawn in phases, the scrips’ rate would be fixed three months after the Cabinet’s approval.