‘Cash refunds will benefit exporters’

Liquidity Crunch

• Currently, refund under RoDTEP, RoSCTL schemes is issued as a scrip
• It can be used to pay basic customs duties at the time of import
• The scrip can be sold to other importers
• Exporters facing a weak export outlook for 2024

New Delhi: The government can consider giving refunds to exporters in cash instead of scrips for tax remission schemes, as it would immediately improve cash flow for them, economic think tank GTRI said on Tuesday.

At present, the refund under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme and the Rebate of State and Central Taxes and Levies (RoSCTL) scheme is issued as a scrip, which can be used to pay basic customs duties at the time of import. The scrip can be sold to other importers, who can later use the scrip instead of cash for payment of basic customs duty. These schemes refund select central and state levies to Indian exporters.

“Refund RODTEP and ROSCTL dues to exporters in cash and not in the form of scrips. This will immediately improve the cash flow of thousands of exporters facing a weak export outlook for 2024,” the Global Trade Research Initiative (GTRI) said.

The RoSCTL refunds taxes for apparel and made-up sectors.