The government has increased the Merchandise Export from India Scheme (MEIS) from 2 per cent to 4 per cent for all garments and made-ups and also increased the upper limit of Remission of State Levies (RoSL) for exports of cotton garments from 1.22 to 1.7 per cent and cotton made-ups from 1.55 per cent to 2.20 per cent. With respect to MEIS, the government has allocated Rs 1,143.15 crores for the year 2017 to 18 with effect from November 1 and Rs 685.89 crores for up to June 30, 2018 -19 to encourage employment generation.

P Nataraj, Chairman, The Southern India Mills’ Association (SIMA) has welcomed the move. However, he said the industry was expecting at least 2 to 3 per cent increase in the RoSL rates considering the various embedded/ blocked taxes of Central & State levies. He hoped that the government would consider the remaining embedded taxes while announcing revised duty drawback rates and ensure the same level of competitiveness that the industry had under special export garment package to enable the exporters to retain existing customers and remain competitive globally.

Nataraj says the drawback and RoSL rates notified after the implementation of GST are only interim relief as these benefits have not considered various embedded taxes and also inverted duty on fabric stage. He points out that several garment and made-ups exporting units have already curtailed their production by 20 to 30 per cent keeping several lakh of people out of jobs. He has appealed to the government to announce new duty drawback rates without further delay with effect from October 1, 2017 so that the financial stress caused to exporters could be minimised.