The Apparel Export Promotion Council (AEPC) has requested the government to review the retrospective withdrawal of Merchandise Exports from India Scheme (MEIS), and demanded reinstatement of MEIS benefits till March 31, 2020.

Rebate of State and Central Taxes and Levies (RoSCTL) announced on March 7, 2019 was in addition to the MEIS benefits, AEPC said.

"Review of the retrospective withdrawal of the benefits will go a long way in ensuring the much needed growth of this sector and resultant creation of additional investment and employment, thereby fulfilling prime minister's dream of making India a $5 trillion economy, " AEPC's Chairman, A Sakthive said.

While thanking the finance, commerce and textile ministers for announcing RoSCTL and other additional ad-hoc incentives to the apparel industry, he said, " RoSCTL was announced w.e.f. March 7, 2019 and was to be in addition to the MEIS benefits available to the industry at the rate of 4 per cent (2 per cent + 2 per cent).

The industry had been given RoSCTL and MEIS simultaneously as each scheme has a specific purpose — MEIS for infrastructural / logistics cost disadvantage and RoSL / RoSCTL for embedded state and central duties and taxes that are not refunded through GST, he said.

"RoSCTL scheme was a result of recommendations of the government appointed Drawback Committee to study and recommend suitable rates for refund of hidden and embedded taxes," he added.

As the industry has already taken benefits of RoSCTL and MEIS into account in costing and tax-planning, Sakthivel said, withdrawal of any of these benefits will affect their working capital.

For the majority in the MSME sector, it will hit their capacity to pay wages and salaries to workers and employers, according to AEPC.

AEPC said the apparel industry has shown consistent growth over the last few decades and apparel exports had reached $16.2 billion in the last financial year. The sector provides employment to 12.9 million, in which women constitute 65-70 per cent of the total workforce.

"This industry is the largest manufacturing sector employer, and is a flag-bearer of the 'Beti Bachao, Beti Padaho' programme. Therefore, we humbly request the government to kindly reinstate the benefits of MEIS up to March 31, 2020," said Sakthivel.

Published On : 21-01-2020

Source : Business Standard