The government plans to reintroduce a reformed tax rebate scheme for exporters merely eight months after launch, after complaints from the industry that the scheme is eroding their margins.
Introduced in October, the Rebate of State and Central Taxes and Levies (RoSCTL) scheme, provides rebate against taxes and levies already paid by exporters on inputs. The rebate is given as tradeablescrips, which exporters can sell to importers. Importers can then use these scrips to pay customs duty, instead of paying in cash. However, exporters complain these scrips are trading at a steep 20 per cent discount, defeating the purpose of the scheme.
As of now, these scrips can be traded even before export realization, with the liability falling on importers. The government feels the scrips are trading at a discount because of this risk component, and plans to make them tradeable only after full export payments are received, which would eliminate the risk factor. It also plans to double the eligibility of these scrips to 24 months from 12 months now.