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Indirect Tax Alert - FTP: Recovery of duty paid through Rebate of State Levies (RoSL) scrips

07 November 2020

  • The Government notified the RoSL scheme to mitigate the incidence of State VAT and other State taxes on export of garments and made ups falling under Chapters 61, 62 and 63 of AIR Schedule of Duty drawback.
  • The erstwhile RoSL scheme was in operation till 06 March 2019 and has been replaced by the Rebate of State and Central Taxes and Levies (RoSCTL) scheme.
  • ROSL rebate was earlier being released in exporter's bank account based on budgetary allocation of Ministry of Textiles (MoT).
  • Subsequently, as per MoT's notification dated 07 March 2019 as amended vide notification dated 09 June 2020, for the pending claims of RoSL which could not be then released due to budget limitations, it has been decided that the remaining RoSL rebate is to be granted by DGFT in the form of electronic duty credit scrips.
  • This will be on the lines of scrips issued under RoSCTL scheme. These scrips can be utilised for payment of duties of Customs and Central Excise. The scrips issued under the RoSL scheme will be freely transferable.
  • DGFT vide notification no:37/2015-2020 dated 06 October 2020, given effect to MoT's notification dated 07 March 2019.
  • The Government had notified the use of scrips for payment of specified duties of Customs under the RoSL scheme vide notification no:38/2020-Customs dated 21 October 2020. Similarly, notification no:07/2020-Central Excise dated 21 October 2020 has been issued which provides for use of scrips for payment of duties of Central Excise for clearance of goods specified in the Fourth Schedule to the Central Excise Act, 1944.
  • The mechanism for recovery of excess payment of RoSL amount is prescribed vide MoT's notification dated 05 August 2020.
  • The Regional Authority of DGFT would be responsible for any recovery that may be required to be made regarding benefits issued by DGFT through scrip mechanism under RoSL.
  • The circular no:43/2016-Customs dated 31 August 2016 prescribed the recovery procedure under the erstwhile ROSL scheme, where the Textile Commissioner in MOT was to undertake recovery of RoSL amounts.
  • In distinction to the above mechanism, for the pending claims for RoSL for which now scrips are to be issued by DGFT, all instances of misuse that may have a bearing on rebate given under RoSL, should be intimated to Shri Praveen Kumar, Dy. DGFT, Udyog Bhawan, Maulana Azad Road, New Delhi-II ([email protected]) (Tel:011-23061562) who has been nominated by DGFT as the nodal authority to look into the matter.

[Circular no:49/2020-Customs dated 3 November 2020]