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Circular No. 43/2016 - Customs
F.No.605/42/2016-DBK (Pt.II)
Government of India
Ministry of Finance, Department of Revenue
Central Board of Excise and Customs
Drawback Division
New Delhi, dated 31
st
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.
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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.
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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.
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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: jsdbk-rev@nic.in
Copy for kind information to -
PS to FM / PS to MOSF(R)
Secretary (Revenue)
Chairman (CBEC)
All Members of CBEC
