Nov 27 th, 2017

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To boost garment exports, the government communicated the post-GST rates that will be used for taking rebate of state taxes and will come under Remission of State Levies (RoSL) on exports of readymade garments and made-ups.

The government also has increased the incentive rate to 4% under an export promotion scheme — MEIS for readymade garments and made-ups.

The Union Textiles Minister Smriti Irani told that the post-GST rates for taking rebate from state levies/taxes and also the Enhanced Merchandise Exports from India Scheme (MEIS) rates will help to boost the exports of garments and made-ups. Irani in a tweet wrote “Announcement on post-GST rates of RoSL will be effective from 1 Oct 2017. Post-GST rates for remission of state levies/taxes will boost exports of garments & made-ups.”

The AEPC which is a Garment exporters’ body told that the increased MEIS rates will release the blocked capital and will help fulfilling Christmas orders.The textiles ministry released a statement in which post-GST rates of RoSL were told to be maximum 1.70% for cotton garments, 1.25 %for man-made fibers( MMF), silk and woolen garments and 1.48% for blended apparels. The ministry said the notification of post-GST RoSL rates for a rebate of state levies/taxes is to boost exports and also to generate more employment in textiles and apparel sector. The Directorate General of Foreign Trade (DGFT) has increased rate for garments and made-ups to 4% of the value of exports from the earlier 2% under MEIS and is in effect from November 1.

The government gives duty benefits to many products under the MEIS scheme. The duty benefits are given at 2%, 3% and 5% depending on the product and country where it is exported. The DGFT told that the incentive rates under MEIS for readymade garments and made-ups have been increased to 4% of the value of exports from November 1 till June 30 next year.  The annual incentives are being estimated to Rs 1,143.15 crore for 2017-18 and Rs 685.89 crore for 2018-19 as per the commerce ministry.

The exporters also want the government to restore the duty drawback rates to increase the competitiveness of the industry in the global market.  The ready-made garment exports fell by almost 40% to USD 829.44 million in October 2017.

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