GEMA, North India's biggest apparel association has urged the government not to replace Merchandise Exports from India Scheme (MEIS) with a new duty refund scheme called Rebate of State and Central Taxes and Levies (RoSCTL). GEMA says, ROSCTL, which is a reimbursement of taxes already paid by the industry, is not similar in scope or role of MEIS. Also the backlog of 8 months reported by the smaller players in the industry has created a working capital crunch which would aggravate if MEIS is discontinued.

The association also requested the government to continue with the existing MEIS for garments (HS Code 61& 62) at 4 per cent until an alternative WTO complaint scheme is formulated and implemented. As the RoSCTL scheme was introduced to provide reimbursement of Central and State Taxes, its introduction should not trigger withdrawal of MEIS, rather alternate Scheme should be devised which is WTO complaint.