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Government of India
Ministry of Finance, Department of Revenue
Central Board of Excise and Customs
Drawback Division
Circular No. 43/2016 - Customs
New Delhi, dated 31st August 2016
To
All Pr. Chief Commissioners / Pr. Directors Generals of CBEC
All Chief Commissioners / Directors General of CBEC
All Pr. Commissioners / Commissioners of CBEC
Director General of Systems & Data Management
Principal Chief Controller of Accounts, CBEC
Madam/Sir,
Subject: Rebate of State Levies on Export of Garments – Implementation by CBEC -reg
The Government of India has decided to adopt a mechanism wherein the rebate
of State levies on garment exports is provided based on a budgetary allocation
of the Ministry of Textiles under a scheme in which the Department of
Revenue/Central Board of Excise and Customs (CBEC) handles disbursement along
with the extant Duty Drawback.
2. In pursuance of this decision, and in consultation with CBEC and keeping
in view inputs from Department of Legal Affairs, the Controllers of Accounts and
the DG Systems (CBEC) on legal, administrative and infrastructure aspects, the
Central Government (Ministry of Textiles) has issued Notification Nos.
12020/03/2016-IT dated 12.8.2016 and 31.8.2016 for the Scheme for Rebate of
State Levies on Export of Garments, 2016 (ROSL scheme). Further, based on the
recommendations of the Drawback Committee constituted by the Central Government
(Ministry of Finance, Department of Revenue, CBEC), the Central Government
(Ministry of Textiles) has issued Notification No. 12020/03/2016-IT dated
13.8.2016 notifying the rates of rebate in Schedule I and Schedule II. These
notifications should be downloaded from egazette.gov.in and perused. This
Circular provides the guideline framework for implementation of this scheme.
3. The ROSL scheme is meant for exports of garments that are defined in the
scheme as goods falling under Chapters 61 or 62 of the Schedule of All Industry
Rates of Drawback. It is applicable to exports with Let Export Order dates from
20.9.2016 onwards. Though applicability is for three years, nonetheless based on
changes in underlying conditions, the Central Government can adjust the rates of
rebate.
4. The rates of rebate notified are accompanied by rebate caps in
Rupees/Unit. These rates are on an average basis and determined in a like manner
as AIRs of Drawback. The rate of rebate is not divisible into any component tax
or input. The rates of rebate are provided either as the general rates of rebate
(Schedule I) or the rates of rebate applicable for exports when the fabric
(including interlining) only has been imported duty free under Special Advance
Authorization (Schedule II). These schedules are based on the extant Schedule of
All Industry Rates of Drawback for Chapters 61 and 62. The rebate is not
applicable on exports made under the general Advance Authorization Scheme with
claim of duty drawback under Rule 6 of the Drawback Rules. The definition of
export in ROSL scheme does not cover movement of goods from DTA to SEZ units.
5. In ROSL scheme, the rebate of State levies is understood to comprise State
VAT/CST on inputs including packaging, fuel, duty on electricity generation and
duties and charges on purchase of grid power, as accumulated through the stages
of production from yarn to finished garments. The ROSL scheme is not mandatory
for an exporter. Therefore, an exporter has to make a conscious choice to opt
for ROSL scheme by making claim for rebate in acceptance of the ROSL schemes
terms and conditions (including under this Circular) cum a declaration of
eligibility for the rate and rebate. This declaration of eligibility is
exporter’s self-declaration that he is eligible for the rate and rebate in as
much as exporter has not claimed and shall not claim the credit/ rebate/ refund/
reimbursement of the specific taxes that comprise the rebate of State levies
under any other mechanism and also that exporter has constituted an Internal
Complaints Committee (ICC), where applicable, in pursuance of the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013.
6. The claim cum declaration of eligibility has to be made by exporter on
drawback exports at item-level. The drawback exports (shipping bill or bill of
export) may be standalone or in combination with other schemes. The options in
permutation with the ROSL Scheme are being provided with separate scheme-codes
which the exporter is to declare at item level to make claim cum declaration for
the rebate. For EDI shipping bill, selection of the scheme-code involving ROSL
scheme at the time of export shall itself amount to making claim cum declaration
of eligibility. For EDI shipping bill this shall be the only means to make the
claim. If need for manual shipping bill arises, only then the exporter printing
the claim cum declaration on the shipping bill shall be accepted. No claim for
rebate shall lie except in this manner. The scheme-codes are being publicized by
the Systems Directorate.
7. The amount of rebate is calculated using the FOB value and the rates and
caps of rebate specified in ROSL scheme. The rate and cap of rebate for a tariff
item as shown in columns (4) and (5), –
(a) of said Schedule I is used for calculation when shipping bill item has
claim for AIR drawback or when the shipping bill item involves export under Rule
7 of Drawback Rules 1995 under claim for Brand Rate of drawback with identifier
9807 followed by tariff item number and suffix “B” of the AIR Drawback Schedule
where provisional Drawback of Customs portion is to be paid;
(b) of said Schedule II is used for calculation when the shipping bill item
has claim for AIR drawback in combination with Special Advance Authorization of
para 4.04A of FTP 2015-20 or when the shipping bill item involves export under
Rule 7 of Drawback Rules 1995 under claim for Brand Rate under this combination
with identifier 9807 followed by tariff item number and suffix “D” of the AIR
Drawback Schedule where provisional Drawback of Customs portion is to be paid.
8. The ROSL scheme provides for rebate claims handling only after the goods are
exported (i.e. on correct filing of Export General Manifest for the shipping
bill or bill of export) and in parallel with Duty Drawback albeit separately,
and after Drawback is processed. For EDI shipping bills the calculation is being
automated by the Systems Directorate. For manual exports, the Deputy/Assistant
Commissioner (Drawback) shall calculate the rebate amount. Before scrolling out
rebate for payment in EDI or manually generating the list for rebate payment,
the DC/AC (Drawback) would rule out existence of alert against exporter or
shipping bill. Based on Central Government (Ministry of Finance) approval, the
DC/AC (Drawback) is authorized by CBEC to issue sanction of rebate. The
scroll/list of payments would be routed to PAO. For EDI shipping bills, the
routing is being arranged by Customs EDI with digital signature in manner
compatible with e-PAO. The PAO shall ensure payment into exporter’s bank account
based on availability of budgetary allocation of Ministry of Textiles.
9. To facilitate exporters, the Systems Directorate is making arrangements to
reflect the rebate amount in shipping bill check list, during export processing
and in print out of post-LEO shipping bill and make available rebate related
information to exporters on similar lines as being made available for Drawback.
10. The ROSL scheme provides that the exporter shall return any over-payment of
rebate arising from miscalculation. It is also a condition of the ROSL scheme
that the rebate allowed is subject to the receipt of sale proceeds within time
allowed under the Foreign Exchange Management Act, 1999 failing which such
rebate is deemed never to have been allowed on the same lines as Duty Drawback,
and any other cause that also affects the Drawback is deemed to have the similar
effect on the rebate. Since the officers of CBEC adopt the processes applicable
to Drawback Scheme for recovery from exporter or repayment by exporter of
Drawback, on this premise, the ROSL scheme declares that in such cases the
decisions with respect to Drawback, including in cases of disputes, are deemed
to apply mutatis mutandis to the rebate. Thus, the officers of CBEC are not
required to directly adjudicate or dispose in appeal the rebate amount; however
the status/decisions in Drawback matters are to be adopted for the rebate.
11. In pursuance of recovery provisions for rebate in the ROSL scheme, it is
guided that the DC/AC (Drawback) is to issue a letter to the exporter in terms
of para 7 of ROSL Scheme informing the rebate amount to be paid into the account
head of Ministry of Textiles and specify that interest at the rate of 15% per
annum on that amount is due from the date of payment of rebate. The letter is to
request the exporter to deposit the full sum within 30 days in the designated
account head of Ministry of Textiles and to submit proof of such deposit to the
office of the Textile Commissioner within 60 days of the date of the letter. The
letter shall also inform the exporter that any such amount that remains to be
reconciled as deposited in the office of the Textile Commissioner would be
recovered by the Textile Commissioner. A copy of this letter shall be endorsed
to the office of the Textile Commissioner for necessary action. These actions by
DC/AC (Drawback), where applicable, are to be taken based on the status of
actions/decisions on the Drawback front. This is an area where the Commissioners
have responsibility of close monitoring of the nature of actions being taken by
the DC/AC (Drawback), for ensuring proper record-keeping distinct from that for
Drawback Scheme and for maintaining effective coordination with the Textile
Commissioner so that actions remain logical and informed as the ROSL scheme has
empowered the Textile Commissioner to have the amounts recovered as arrears of
land revenue. Moreover, to ensure hundred percent effective communication the
above mentioned endorsed letters or other documentary exchanges made with
Textile Commissioner’s office should necessarily be replicated via official
email.
12. The ROSL scheme requires the Ministry of Textiles to cause checks to ensure
integrity of the declarations of eligibility for rate and rebate made by
exporters on the counts of having constituted the ICC where required and/or not
having claimed reimbursement etc of the specific State levies under any other
mechanism. For this purposes, a monthly list of rebate claims processed in EDI
containing details that include IEC number, name of exporter, State of origin of
goods declared in shipping bill and shipping bill number-date-wise amount of
rebate scrolled, would be conveyed by the Systems Directorate via email to
Ministry of Textiles. Every Customs location from where any rebate may have been
processed manually shall convey this information from its official email. Where
recovery arises on ground of wrongful declaration of eligibility by exporter,
the entire actions for recovery would be initiated and concluded by the Textile
Commissioner.
13. It is clarified that making good short-payment of rebate, if any, or when
rebate allowed is deposited back by exporter with office of Textile Commissioner
but is required to be repaid to exporter, would require the DC/AC (Drawback) to
manually issue payment list to the PAO.
14. The Systems Directorate shall publicize its arrangements including to
exporters in sufficient advance of 20.9.2016 for seamless implementation of the
ROSL scheme. Similarly, the Pr. CCA (CBEC) shall publicize in advance its
preparations and procedures including the account heads to exporters, officers
of CBEC and PAOs.
15. Based on this guideline framework the individual Commissioners are required
to provide adequate guidance to officers and exporters, inter alia, also giving
sufficient attention with respect to actions described in paras 11 and 13 above
and to facilitate the smooth functioning of the ROSL scheme.
16. Difficulties in implementation, if any, that a Commissioner is not able to
resolve, shall be resolved by the Chief Commissioner under intimation to the
Board. Issues that Chief Commissioners are not in a position to resolve should
be referred to the Board.
(Rajiv Talwar)
Joint Secretary to the Government of India
Email: [email protected]
Copy for kind information to -
PS to FM / PS to MOSF(R)
Secretary (Revenue)
Chairman (CBEC)
All Members of CBEC
F.No.605/42/2016-DBK (Pt.II)
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