The Confederation of Indian Textile Industry is seeking inclusion of cotton yarn and fabric in the new scheme.

By: FE Bureau | March 8, 2019

The Union Cabinet’s approval for a scheme for rebate on all state and central embedded taxes to support the textile sector has been welcomed by the industry. “The proposed measures will boost India’s competitiveness in export markets and ensure equitable and inclusive growth of apparel and made-up sector,” the Confederation of Indian Textile Industry (CITI) said on Thursday.

Welcoming the decision, CITI chairman Sanjay Kumar Jain said the scheme will enable the government to take various measures for making exports of apparel and made-ups free of any embedded central and state levies.

He said currently, apparel and made-ups segments are supported under the scheme for rebate of state levies (RoSL). However, certain state as well as central taxes continue to be present in the cost of exports. The Cabinet decision provides for a scheme to rebate all embedded state and central taxes/levies for apparel and made-ups which have a combined share of around 56% in India’s textile export basket. Rebate of taxes/levies has been permitted through an IT-driven scrip system at notified rates, which will boost exports, he added.

Jain, however, pointed out that the new scheme only covers apparel and made-ups and not other important sectors of fabric and cotton yarn. To ensure that no taxes are exported and to make Indian cotton yarn and fabric globally competitive, the confederation has requested the government to include the two in the new scheme.

It is estimated that there are many blocked/embedded taxes/levies/surcharges of about 6-7% for spun yarn and fabric sector which are not reimbursed and are adding to the cost of exports. India’s cotton yarn and fabric exports are also struggling because of the duty disadvantage faced by the exporters in the major markets, Jain said. (Source: