Govt weighs extending textile export incentive RoSCTL beyond Sep 30 | Economy & Policy News

The government may extend the tenure of the Rebate of State and Central Taxes and Levies (RoSCTL) scheme, an export-boosting incentive for the textile sector, beyond September 30, an official aware of the matter said.

 

While the industry has sought a five-year extension of the scheme to align it with the Sixteenth Finance Commission period, the final call on the extension period rests with the finance ministry’s Department of Expenditure (DoE), the official said, requesting anonymity.

 

“We have also asked the DoE to double the outlay under the scheme from Rs 5,000 crore allocated for the current financial year,” the official added.

  

Under RoSCTL, the government reimburses embedded state and central taxes on textile exports, including apparel, garments and woven or knitted items. It aims to ensure that taxes are not exported, thereby maintaining the competitiveness of the products.

 

The government is estimated to have spent Rs 10,010 crore on RoSCTL in 2025-26 (FY26), according to the revised estimate given in the FY27 Budget.

 

The industry expects the final decision on the extension of the scheme and its allocation by September 30. Certainty and predictability in the RoSCTL scheme are long-standing demands of the textile industry.

 

“Policy consistency is a key factor that influences investment decisions, and the textile sector requires investments on a sustainable basis to reach the 2030 goals set for it by the government,” said Updeep Singh Chatrath, chairman of industry body Assocham’s National Council on Textiles and Technical Textiles.

 

The government has set a target of raising textile exports to $100 billion by 2030 from around $37 billion currently and increasing the size of the sector to $350 billion by 2030 from around $190 billion. Industry estimates suggest that such growth would require investment of at least $60 billion, Chatrath said. That investment, in turn, requires certainty and policy consistency, he added.

 

The tax remission scheme essentially started a decade ago as the Rebate of State Levies (RoSL) scheme, which refunded local and state taxes. Following the introduction of the goods and services tax (GST) regime in 2017, the government replaced RoSL with RoSCTL. This transition occurred because, while GST subsumed several major indirect taxes, certain embedded state and central levies remained unrefunded, requiring a new mechanism to keep exports competitive.

 

The government also runs a similar tax refund scheme for other exported products called the Remission of Duties and Taxes on Exported Products (RoDTEP), which is also set to end on September 30. A five-year extension of this scheme is also under active consideration.

 

The two flagship tax remission schemes have been extended several times in the past, often together. The government last extended both schemes by six months in March to support exporters amid the conflict in West Asia.