Learn How Karbon Works for Indian Textile Exporters
Understand the RoDTEP scheme, optimize your export incentives, and ensure smooth international trade with Karbon.
Indian exporters have multiple cost challenges, especially when it comes to embedded taxes on raw materials and production. The RoSCTL Scheme (Rebate of State and Central Taxes and Levies) was introduced to address this issue by refunding these indirect taxes on apparel, garments, and made-up exports.
For Indian textile exporters, RoSCTL is a big financial boon. Unlike other schemes, it directly offsets unrefunded taxes, so you get the best possible margins. Understanding and using the RoSCTL scheme can boost your cash flow and profitability. Read on to learn more.
The Rebate of State and Central Taxes and Levies (RoSCTL) Scheme is an Indian government initiative to support apparel, garment, and made-up exporters by refunding embedded taxes that are not refundable under other schemes. These taxes include state taxes like electricity duty, VAT on fuel, and central taxes like excise duty on raw materials.
The scheme is to boost India’s textile exports by ensuring that manufacturers are not at a loss due to unrecoverable tax burden. By providing a direct rebate, RoSCTL helps exporter in reducing their overall cost, making Indian products more competitive globally.
While MEIS (Merchandise Exports from India Scheme) is discontinued, RoSCTL and RoDTEP (Remission of Duties and Taxes on Exported Products) are still in place. But RoSCTL is specific to the textile sector whereas RoDTEP is for broader industry.
For textile exporters, RoSCTL is the best way to recover embedded taxes, hence it is a key incentive for textile exporters.
RoSCTL Scheme provides big monetary benefits to Indian textile exporters, helps in reducing costs and increases global competitiveness. Here’s how:
By refunding state and central embedded taxes, RoSCTL helps exporters reduce cost and increase profit margins. These include VAT on fuel, electricity duty, mandi tax, and central excise duty on raw materials, which are non-refundable otherwise.
With reduced cost, Indian apparel and textile exports become more price competitive in the international market. This makes Indian businesses more attractive to global buyers and increases export demand.
Instead of waiting for long reimbursements, RoSCTL provides rebate through transferable e-scrips which can be used to pay customs duty or sold to other businesses for liquidity.
Unlike some export incentives, RoSCTL does not have a fixed upper cap on rebate. Any eligible exporter can claim benefit, it’s open to all sizes of businesses.
To get RoSCTL benefits you need to meet specific eligibility criteria. Here’s who qualifies:
The scheme applies only to textile exporters, covering categories such as:
Other sectors are not covered under RoSCTL and may fall under RoDTEP or other incentive schemes.
To claim RoSCTL benefits you must have a valid Import Export Code (IEC) issued by the DGFT. IEC is a unique business identifier for export transactions.
Eligible businesses must ensure:
If you meet these criteria, you can get maximum rebates and cash flow under the RoSCTL scheme.
Exporters can avail RoSCTL benefits by following these steps:
Visit DGFT (Directorate General of Foreign Trade) website and register your company under E-Scrip module. Please ensure your IEC (Import Export Code) is linked to your DGFT account.
While exporting, submit a shipping bill through ICEGATE and ensure HS codes (61, 62, 63) are correct. Make sure to declare RoSCTL benefits at the time of export to avoid rejection.
After customs clearance, RoSCTL rebates will be credited as e-scrips in DGFT portal. These digital scrips can be transferred, sold or used to pay customs duties.
Companies can redeem e-scrips to offset basic customs duty on imports. If not required, they can sell e-scrips to other importers for liquidity.
Follow these steps and you can easily avail RoSCTL benefits and improve cash flow in your business.
Latest rebate rates for different product categories.
Rebate of State and Central Taxes and Levies (RoSCTL) scheme offers rebate to exporters of apparel and made-ups to offset embedded taxes and levies. As per latest data, the maximum rebate rates are:
These rates are designed to make Indian textile products more competitive in global market.
Policy updates (e.g., extensions or changes).
In Union Budget FY2025-26, Finance Minister Nirmala Sitharaman announced an export promotion mission with sectoral targets. This includes 10% increase in allocations for key tax remission schemes viz. Remission of Duties and Taxes on Exported Products (RoDTEP) and RoSCTL. This will provide additional support to exporters in difficult global economic conditions.
RoSCTL scheme was notified on March 8, 2019 and has been extended till March 31, 2026. This extension shows the government’s commitment to sustain the growth of the textile and apparel industry by reducing the burden of embedded taxes and levies on exporters.
Where to check official notifications?
For latest and accurate information on RoSCTL rates and policy updates, exporters can check:
Keep visiting these official channels to stay updated on any changes or updates on RoSCTL.
RoSCTL is a big incentive for Indian textile exporters to recover embedded taxes and improve profit margins. With the scheme extended till 2026, businesses need to stay updated on policy changes and rebate rates to get maximum benefits.
Beyond tax rebates, managing international payments is key to a successful export business. Karbon makes cross border transactions easier with faster remittances, better forex rates and seamless compliance handling.
For Indian exporters looking to optimise global payments, Karbon is the reliable and cost effective solution. Try Karbon’s forex and international payment services today to simplify your export transactions.
Unlike the earlier Rebate of State Levies (ROSL) scheme, RoSCTL provides rebates on both state and central taxes. It offers a more comprehensive tax reimbursement framework with higher rebate rates and covers a wider range of embedded taxes that weren't addressed under ROSL.
Yes, RoSCTL benefits can be availed along with certain other export incentives like Interest Equalization Scheme. But not with Duty Drawback Scheme for the same taxes. Exporters should check which combination is beneficial for their specific export products.
If your export product has components from both eligible (Chapters 61, 62, 63) and non-eligible categories, RoSCTL benefit will be calculated proportionally on eligible components only. You need to maintain proper documents showing breakup of these components.
Typically e-scrips are issued within 2-4 weeks after customs clearance provided all documents are in order. However, processing time may vary as per verification requirements and submission of correct information in shipping bills.
Yes, there is a small fee for transferring e-scrips to other businesses through DGFT portal. Currently the transaction fee is 0.5% of scrip value. This may change as per government notifications.
Rebate amount is calculated as a % of FOB value of exports. The percentage varies as per product category as notified by the government. Calculation formula is: RoSCTL Amount = FOB Value × Applicable Rate (%)
RoSCTL e-scrips are valid for 24 months from the date of issue. Unused scrips expire after this period and cannot be revalidated, so use or trade them before they expire.
Market value of e-scrips is around 92-97% of face value depending on market demand. Factors affecting valuation are:
You can file a revision application through the ICEGATE portal within the given timeframe. But significant errors may delay or reject your claims, so double check everything before submitting.
Disputes related to RoSCTL claims are handled by the respective Customs Commissionerate where the export was done. Exporters can appeal if a claim is rejected or there is a discrepancy in the rebate amount. Appeal process involves submitting the required documents to support your claim.
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