The Indian government has today notified Remission of Duties and Taxes on Exported Products (RoDTEP) scheme guidelines and rates. Cotton yarn and fabrics are among the 8,555 tariff lines covered under RoDTEP. The scheme for zero rating of exports will provide a level playing field to domestic industry and boost India's competitiveness in the global markets. The RoDTEP is "based on the globally accepted principle that taxes and duties should not be exported, and taxes and levies borne on the exported products should be either exempted or remitted to exporters," a Ministry of Commerce and Industry release said. The scheme's objective is to refund, currently un-refunded: (i) duties/ taxes/ levies, at the Central, State & local level, borne on the exported product, including prior stage cumulative indirect taxes on goods & services used in production of the exported product, and (ii) such indirect duties/ taxes/ levies in respect of distribution of exported products. However, rebate under the Scheme shall not be available in respect of duties and taxes already exempted or remitted or credited. RoDTEP support will be available to eligible exporters at a notified rate as a percentage of Freight On Board (FOB) value. Rebate on certain export products will also be subject to value cap per unit of the exported product. Scheme is to be implemented by Customs through a simplified IT System. Rebate will be issued in the form of a transferable duty credit/ electronic scrip (e-scrip) which will be maintained in an electronic ledger by the Central Board of Indirect Taxes & Customs (CBIC). Identified export sectors and rates under RoDTEP cover 8555 tariff lines, in addition to similar support being extended to apparel and made-ups exports under RoSCTL scheme of Ministry of Textiles. The entire valve chain of textiles also gets covered through RoDTEP & RoSCTL.The cotton yarn and fabrics were hitherto eligible only for duty drawback and now on, the cotton yarn will get 3.8 per cent RoDTEP with a cap of ₹11.40 per kilo and woven fabric of 4.3 per cent with a cap of ₹3.4 per sq metre, according to Ashwin Chandran, chairman, The Southern India Mills’ Association (SIMA). RoDTEP would give impetus and opportunity for India to "increase exports, convert the raw cotton being exported into value added products, increase foreign exchange and create jobs for several lakhs of people, apart from utilising the surplus capacity already created both in the spinning and weaving sectors," Chandran said in a SIMA press release. Chandran said that knitted fabric has been given only 1 per cent and requested the Government to review the rate based on modular RoDTEP calculation. He said that the knitted fabric made out of yarn should get higher benefit than the yarn which has been taken care in the case of woven fabric.
Source: PIB
To boost exports, the government on Tuesday announced rates of tax refunds under the export promotion scheme RoDTEP for 8,555 products, such as marine goods, yarn, dairy items.
Source: Economic Times
The Central Board of Indirect Taxes and Customs (CBIC) streamlined procedure for closing inland container depots and container freight stations, limiting the time to four months. Finance ministry in a statement Tuesday said the procedures will provide relief to custodians of such ICDs and CFSs since there was no deadline for closure till now. ICDs and CFS play a vital role in the exim trade as they store and clear import and export goods. These facilities are notified under the Customs Act, 1962 and are administered by the Customs authorities. However, at times a custodian may like to close or de-notify a facility. Disposal of un-cleared, seized and confiscated goods via import or export are pre-requisites for the de-notification, and the Board noted that this was taking a long time, causing difficulties for the custodians. wind up operation has to submit an application to jurisdictional principal commissioner or commissioner of customs for de-notifying the ICD or CFS. A nodal officer at the level of deputy or assistant commissioner of customs would then facilitate the de-notification by coordinating the disposal of the goods lying at the facility in a time bound manner. "The new procedure would ensure undue cost and time over runs are avoided. Importantly, the de-notification shall be completed within a maximum of four months from the date of receipt of complete application. This is yet another trade facilitation initiative by CBIC," the Board said. The Board issued the procedure after it found that not only were custodians getting impacted, customs field formations faced challenges while ensuring timely payment of cost recovery charges and disposal of un-cleared, seized and confiscated goods.
Source: Economic Times
The government on Tuesday notified tax refund rates under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme that will cover as many as 75% of tariff lines, ending months of uncertainties over the actual coverage and magnitude of relief under the programme. The rates will be in the range of 0.3-4.3% of the freight-on-board value of the exported products. However, while the programme will cover 8,555 products (tariff lines), over a thousand more than the Merchandise Exports from India Scheme (MEIS) that it has replaced, the allocation for it is less than a half of what was the government’s annual outgo under the MEIS. The government intends to make it easier for more and more entrepreneurs to invest and set up industrial units in UP.Uttar Pradesh amends key labour law, abolishes imprisonmentThe bulletin said that views expressed in the article are those of the authors and do not necessarily represent the views of the central bank.Inflation likely to stabilise rest of the year: RBI's August bulletin Of course, both the schemes are not strictly comparable (the MEIS was an incentive programme). But the RoDTEP roll-out will effectively reduce the benefits for most exporters, as they gear up to take advantage of a resurgence in global trade in the aftermath of the pandemic. The steel, pharma and chemicals sectors have been kept out of the RoDTEP ambit, commerce secretary BVR Subrahmanyam said, given that exports from these sectors are faring relatively well. This has upset exporters of these products. Similarly, engineering goods firms, accounting for about a fourth of merchandise exports, have complained that taxes embedded in primary input (steel) are not factored in the RoDTEP rates for them. This will make it difficult for them to realise the ambitious $107-billion engineering goods export target for FY22, according to EEPC India chairman Mahesh Desai. The government has now allocated Rs 19,400 crore for both its tax refund schemes — Rebate of State and Central Taxes & Levies (RoSCTL) scheme for garment and made-up exporters and RoDTEP for most others — to cover obligations from January 2021 to March 2022. For FY22 alone, the allocation could be around `17,000 crore, higher than the budgetary outlay of Rs 13,000 crore, a source said. Importantly, much to the dismay of exporters, the scheme won’t be an open-ended one. As per the notification, projected remissions for each year will have to be managed within the approved budgetary outlay. The budgetary allocation will be fixed by the revenue department in consultation with its commerce counterpart. Exporters have already cautioned that any inadequate remission will compound a Covid-induced liquidity crunch and erode their competitiveness in the global market when demand from key economies is reviving. Nevertheless, many exporters have hailed the notification, saying it, at least, signals predictability in the country’s tax refund regime for them. The RoDTEP scheme is supposed to reimburse various embedded levies (not subsumed by the goods and services tax) paid on inputs used in exported products to make exports zero-rated. The government had allocated Rs 39,097 crore for MEIS in FY20, before drastically reducing it to Rs 15,555 crore for the first three quarters of FY21 in the wake of the pandemic. Under the MEIS, the government used to offer eligible companies scrips in the range of 2-5% of the freight-on-board value of their exports, higher than the RoDTEP refund rates. The government had initially wanted to replace the RoSCTL with the RoDTEP scheme and budgeted an outlay of Rs 13,000 crore to cover both in FY22. But it junked the plan last month when it extended the validity of the RoSCTL by over three years. In late July 2020, the government set up a committee under former commerce secretary GK Pillai to recommend RoDTEP rates. The panel’s report was then vetted by the departments of revenue and commerce. After a roller-coaster ride last fiscal, exports have now crossed the pre-Covid (same months in 2019) levels for five straight months through July, suggesting that a trade recovery is taking roots on the back of improved economic growth prospects in key western markets. Already, the government has set a lofty merchandise export target of $400 billion for FY22, against $291 billion last fiscal. Welcoming the notification, A Sakthivel, president of the exporters’ body FIEO, said the much-awaited rates will “help in easing the liquidity of the exporters, ensuring predictability and stability, thus helping competitiveness of exports over a long-time horizon”.
Source: Financial Express
The announcement of Remission of Duties and Taxes on Exported Products (RoDTEP) rates will help in easing liquidity and enhance the competitiveness of domestic exporters over a long-time horizon, FIEO said on Tuesday. Federation of Indian Export Organisations (FIEO) President A Sakthivel said the commerce ministry should quickly upload the rates in the system so that exporters can generate their scrips instantly for utilising the benefits under the scheme. He, however, urged the government to include pharma, chemicals, iron and steel under the RoDTEP scheme from January 1, 2021. These sectors are not covered under the ambit of the scheme, rates for which was notified today "Since the rates are fixed on the basis of the data furnished by the industry, which was also affected due to the pandemic, the rates may be reviewed if more comprehensive and updated data is furnished by the industry," he said. Exports are on course to achieve $400 billion in the current fiscal, but logistics challenges, particularly unavailability of of containers, shut out by shipping lines and high freights pose a "serious challenge", he added.
He requested the government to take NSE -1.95 % suitable measures so that these hiccups can be overcome.
Source: Economic Times
Driven by pandemic-induced lifestyle changes, India’s textile exporters are set to see a growth of 20-25 per cent during the current financial year, said a report by rating agency Icra. The factors that have driven a sharp surge in demand for home improvement products over the past one year are expected to sustain during the remaining quarters of FY2022, continuing on the trend of the past three quarters. Moreover, expectations of a strong festive demand this year, backed by favourable vaccination coverage across key markets is reflected in the healthy order book position of Indian home textile exporters. Icra’s sample set of companies (comprising large and listed players, accounting for 35-40 per cent share in India’s home textile exports) are projected to clock a robust double-digit growth of 20-25 per cent in FY2022, the report said. Pavethra Ponniah, Senior Vice President and Co-Group Head, Corporate Sector Ratings, Icra, said: “For the past three quarters, sales for the sample set have averaged 25-40 per cent higher than the three-year average for the pre-Covid period. Home textile exports was one of the first few textile segments to recover from the impact of the pandemic last fiscal, with companies reverting to year-on-year growth from Q2 FY2021 itself and reporting three consecutive quarters of double-digit growth thereafter.” The export demand was mainly driven by the US, the largest market, accounting for 60 per cent of India’s home textile exports. Compared to a 9 per cent increase in India’s home textile product exports of $5.7 billion in FY2021, exports to the US increased by 14 per cent, while exports to the other major markets of the UK and the EU reported a year-on-year decline during the year. Besides faster opening up, increase in exports to the US is partly attributable to the distribution model for these products, with a meaningful share accounted for by the large departmental chains that remained open even during the lockdown phase, Ponniah added. The growth numbers are followed by a subdued 5 per cent growth in revenues reported by the sample in FY2021, primarily due to 40 per cent year-on-year dent in performance in Q1 FY2021; the sample grew by 25 per cent during the rest of the year. It is noted that the sector companies had reported 18 per cent year on year decline in operating income in the fourth quarter of FY2020 as well, as the pandemic had started affecting the key countries of export. However, even after adjusting the base for the same, Indian home textile exporters are estimated to have reported a healthy growth of 15-20 per cent in the nine-month period ended March 2021. Icra’s channel checks suggest that the larger exporters have robust order backlog and are likely to rely more on job-work/ outsourcing to fulfil delivery commitments over the next few quarters. In terms of financial performance, improved economies of scale and softer input costs helped the companies in the sample report an improvement in operating margins in FY2021. While benefits of operating leverage are likely to sustain in FY2022, with expectations of a healthy sales turnover, cost pressures have intensified. “Cotton yarn, a key raw material for manufacturing made-ups, has been trading at nearly 40-50 per cent higher levels. Nevertheless, the rating agency expects operating efficiencies and re-negotiation of product prices amid sustained cost pressures to help companies maintain their profitability at robust levels,” the report added. Icra’s sample reported a dip in profit margins in Q4 FY2021 as many players, particularly the larger ones, did not factor in export incentive benefits, or factored in the same at lower rates for the quarter in the absence of any clarity on the new export incentive scheme. However, with the Government notifying continuation of the Rebate of State and Central Taxes and Levies (RoSCTL) scheme on exports of apparels and made-ups till March 31, 2024, companies recognised their export incentives for the previous quarter in Q1 FY2022, reporting 500-600 bps jump in operating margins to 21.9 per cent on a sequential basis, from 16.1 per cent in Q4 FY2021. Adjusted for this, operating margins were still healthy at 17.6 per cent in Q1 FY2022 (Q4 FY2021: 20.6%), though lower than the previous quarter due to the impact of higher raw material prices. Clarity on the scheme has brought in much-needed relief to the Indian exporters, as this would enable them to effectively price their products without worrying about retrospective changes, it said. Nidhi Marwaha, Vice President and Sector Head, Corporate Sector Ratings, Icra, said: “Going forward, while the opening up of economies will lead to some moderation in demand with increased household budgets allocated to alternate discretionary uses such as travel and dining out, greater prevalence of work-from-home vis-à-vis pre-Covid times is likely to sustain demand for home textile products. Further, higher occupancy in the hospitality sector is expected to support recovery in institutional demand, which has remained muted in the recent quarters.”
Source: Business Standard
The construction of two micro, small and medium enterprises (MSME) parks in the New Okhla Industrial Development Authority (Noida) area of Gautam Budh Nagar district in Uttar Pradesh has gained momentum with 812 investors buying lands at the proposed sites in Sector 29 and Sector 32 to set up units at the cost of Rs 2,345 crore. The companies to be set up by these investors will provide employment to more than 42,800 people. The MSME parks in Noida will be followed by the establishment of similar parks in Agra, Kanpur, Moradabad, Varanasi, Azamgarh and Gorakhpur. In terms of employment generation, the MSME sector is second only to agriculture in UP. UP’s MSME units constitute 14.2 per cent of the total MSMEs in the country and have been exporting goods worth more than Rs 1.14-lakh crore annually for the last three consecutive years. The MSME Parks will provide facilities like business and shopping centres, incubation centres, hotels and restaurants, hostels, office blocks, health and fire stations along with factories and factory sheds. The parks will also have better roads and power and water supply networks. A certification lab will also be set up at the park itself. The parks will also feature storehouses, container and truck terminals, railway siding infrastructure and fuel stations. As per the plan, an MSME park can be developed in an area ranging from 20 to 100 acres. Fifty per cent of the total area of the park will be reserved for the MSME sector of which 60 per cent will go to micro and small industries. The first-time investors will get a 50 per cent exemption in stamp duty. According to YEIDA officials, all the entrepreneurs who have procured land in the park have started the construction of their units. Major companies that have started building their factories are Swastik Industries, United Logistics, Syria Impex, DR Auto Industries, Rushya Agritech Pvt Ltd, MV Exim Pvt Ltd, Ranexa Medical, Shree Balaji Printing and Gapdec Infratech Ltd. There will be a wide variety of companies at the parks making readymade garments, auto parts, food processing and printing units. The government will get revenue through GST on the products of these companies.
Source: The News 18
Surat: The political uncertainty and chaos in Afghanistan after Taliban’s stunningly rapid takeover of the country is having repercussions in the textile hub of Surat. While losing business in the conflict-torn country looks imminent, exporters and brokers of textile products claim that payment of about Rs 400 crore has been stuck due to the unrest. They fear that the payments won’t be received soon given the scale of uncertanity there. Punjabi suits and dupattas made in Surat are in high demand in Afghanistan and Pakistan. Until three years ago, businessmen from Afghanistan used to visit the city frequently to buy finished garments for women. They used to select the products personally and make payments through their business associates in Delhi. It is estimated that garments worth at least Rs 100 crore were sent to Afghanistan via Pakistan or Dubai every month. Raju Bhatia, a broker working for multiple exporters, told TOI: “In the textile market, the credit period is up to three months and in goods supplied to Afghanistan via Pakistan or Dubai, the payment is received in three to The export through Pakistan or Dubai is also impacted due to disturbance. “The Punjabi suit and dupatta manufactured in the city are high in demand in Pakistan and Afghanistan due to its quality and variety. Importers want these products but due to irregular supply chains, no one wants to take any risk in the current situation to export,” said Gurpal Singh, a garment manufacturer and exporter four months. However, payment of around Rs 400 crore of many exporters is stuck due to the unrest.
Source: Times of India
KARACHI: Despite being an agricultural country, the prices of cotton, cotton yarn, energy, water, labour, port, and transport were highest in Pakistan compared to all textile exporters of world, an industry official said on Tuesday. “The textile sector contributes more than 60 percent share in the total national exports, earns highest foreign exchange and provides huge employment, however, it still lacks the deserving attention of the government,” said Jawed Bilwani, chairman, Pakistan Apparel Forum, in a statement. He suggested the government to accord priority and attention to the cotton production, cultivation area, and cotton yield in order to support the entire value-added textile chain because cotton and cotton yarn were basic raw materials for the survival and development of textile export sector.
Source: The News
Spinners are unwilling to reduce the prices of yarn in local markets even though apparel and terry towel exporters have demanded as much in order to remain competitive at the international level. "I held an internal meeting with our members today [Tuesday] to discuss the prices of yarn and demand from garment makers and terry towel exporters," said Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA). For all latest news, follow The Daily Star's Google News channel. "I even had to face a barrage of questions in the meeting regarding why I asked them to maintain the prices of yarn in local markets last week," he added. Garment exporters want spinners to provide an uninterrupted supply of yarn at competitive prices in order to cater to the increasing number of work orders from international retailers and brands. The number of work orders is rising in line with the reopening of economies in the western world. "We may sit in another round of meetings with garment manufacturers and exporters on Saturday or Sunday to find an amicable solution to this impasse," Khokon said. The BTMA chief also mentioned that spinners honoured a previous commitment made during a meeting with garment exporters last week to maintain the current yarn prices. The most highly demanded 30 carded yarn was selling for about $4.25 per kilogramme in local markets as of yesterday, he added. Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association, said he is yet to receive any invitation from the BTMA for the next meeting. The meeting was supposed to be held a bit earlier as per the commitment made in the previous meeting "If invited, I will attend to discuss the yarn prices," Hassan told The Daily Star by phone. "However, everything has been stated in a letter to the commerce minister," he added. Echoing Hassan's views, Shahadat Hossain Sohel, chairman of the Bangladesh Terry Towel & Linen Manufacturers & Exporters Association, also demanded an adequate supply of yarn at competitive prices as they have a lot of work orders from international buyers. Mohammad Hatem, first vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association, expressed hope that the impasse regarding yarn prices will soon come to an end through consultation among the leaders of relevant trade bodies.
Source: The Daily Star
ISLAMABAD :Deputy Chairman Senate Mirza Muhammad Afridi on Tuesday emphasized that Pakistan values its relations with Vietnam. "Pakistan and Vietnam can learn a lot from each other's experiences in the field of trade and economic cooperation." he said during a meeting with the Ambassador of Vietnam. Deputy Chairman Senate acknowledged Vietnam efforts to take steps for economic development. He said that cooperation can also be promoted in textile, agriculture and other fields. Mirza Afridi highlighted that diplomacy at the parliamentary level can take bilateral relations to new heights. He believed that accelerating the exchange of parliamentary delegations will further strengthen bilateral ties. During the meeting, they emphasised on trade and economic cooperation between the two countries to further strengthen people-to-people contact Deputy Chairman Senate Mirza Muhammad Afridi reiterated that Vietnamese investors need to take advantage of Pakistan's improved business environment. Mirza Muhammad Afridi highlighted that Pakistan is providing visa on arrival facility for citizens of Vietnam. Deputy Chairman Senate Mirza Muhammad Afridi acknowledged that Pakistan appreciates Vietnam's rapid economic growth. The two countries need to promote cooperation in the fields of tourism and education. Special Economic Zones under CPEC are very important for regional connectivity and development. Deputy Chairman also emphasized that Vietnamese investors can take advantage of investment opportunities in Balochistan, especially in Gwadar. While speaking on the Kashmir Issue Deputy Chairman Mirza Afridi said that the international community should play its role in resolving the Kashmir issue. The Kashmir issue should be resolved in accordance with the aspirations of the Kashmiri people and UN resolutions. The Deputy Chairman Senate also extended his well wishes to the Government, Parliament and the people of Vietnam. He assured the Ambassador of all possible cooperation for further strengthening of Pak-Vietnam relations. The Ambassador said that that we are proud of the friendship between Pakistan and Vietnam which spans over 50 years. He said that the two countries have excellent cooperation at the international level. The ambassador believed that there is scope for further enhancement of trade and economic cooperation. He informed that contacts were being made with various chambers of commerce and business community to promote trade and explore opportunities for multi-dimensional cooperation and linkage.
Source: Urdu Point
They worry that such facilities will be misused to bring a large quantity of yarn into the country under false declarations, which in turn will flood the domestic market If Bangladesh allows yarn imports through all land ports across the country, and permits partial imports of the readymade garment industry's key material under the same letters of credit (LCs), it will seriously impact the local textile mills, industry leaders have said. They worry that such facilities will be misused to bring a large quantity of yarn into the country under false declarations, which in turn will flood the domestic market. The Bangladesh Textile Mills Association (BTMA) has launched an effort to reach out to the National Board of Revenue (NBR) and ministries concerned in a bid to prevent such a scenario, and the decision came following a meeting of the association's senior leaders on Tuesday. An insider who attended the meeting said, "We will soon reach out to the government to showcase the impact local textile industry will suffer due to irregularities if yarn imports are allowed through every land port and permissions are granted for partial imports. "But before that, we aim to hold meetings with both organisations of the RMG industry." A number of BTMA leaders – who were also present at the meeting – on condition of anonymity said they are concerned that if all land ports allow yarn imports, large amounts of the key material imported under false declaration will flood the local market. "If this happens, the local textile mills that are established through a lot of investment might suffer losses. We will write to the ministry concerned and the NBR regarding the matter." BTMA President Mohammad Ali Khokon attended the meeting among many others. RMG owners have been expressing their concerns for some time over the unusual rise of yarn, especially in the local market. Though apparel makers are complaining that the spinning mill owners are hiking yarn prices unnaturally, they in response have claimed that the material's price has gone up in the international market. Last week, leaders of both sectors held a meeting on the issue, and the BTMA assured the RMG leaders that the yarn prices will not increase for now. After only a few days of that meeting, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) wrote to the commerce ministry seeking permission for importing yarn through all land ports across the country, and for partial imports of the key material under the same letters of credit (LCs).
Source: The Business Standard
