ROSL scheme and ITC under GST

[Raveendran PM]

Whether the Registered person under GST can claim ROSL scheme and ITC under GST.

In terms of Circular No. 43/2016 - Customs dated 31st August 2016 on the subject- Rebate of State Levies on Export of Garments – Implementation by CBEC Ministry of Finance, Department of Revenue Central Board of Excise and Customs Drawback Division at para 5 of the said Circular clearly states that “ 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”

However Post -GST , the CBIC clarified as below:

3. In pursuance of revised list of taxes/levies considered for calculation of ROSL rates post GST, definition of rebate of state levies under clause 3.5 of scheme guidelines of ROSL for garments and made-ups notified vide Notification No.12020/03/2016-IT dated 12.8.2016 and vide Notification No.12015/47/2016-IT dated 3.1.2017 respectively is being amended and the same may now be read as:6/29/2021 Post GST interim Rate of ROSL on Export of Garments & Made-ups https://taxguru.in/goods-and-service-tax/post-gst-interim-rate-of-rosl-on-export-of-garments-made-ups.html 2/2 “3.5 Rebate of State Levies shall be understood to comprise VAT on fuel used in transportation (raw materials, finished goods and factory workers), VAT on fuel used in generation of captive power, Mandi tax on purchase of cotton and Duty on electricity used in manufacture as accumulated from stage of Cotton/MMF fibre till garment/made up stage”.

Hence only VAT component permitted to get refund under ROSL scheme.

Have the view by experts.

AI Summary

Can a GST Registered Person Claim Both ROSL Scheme and Input Tax Credit? Clarification on Eligible VAT Refunds. A query was raised regarding whether a registered person under GST can claim both the Rebate of State Levies (ROSL) scheme and Input Tax Credit (ITC) under GST. The ROSL scheme, as per a 2016 circular, includes rebates on state levies like VAT/CST on inputs and other duties through production stages. Post-GST, the Central Board of Indirect Taxes and Customs (CBIC) revised the ROSL rates, limiting rebates to VAT on fuel, Mandi tax, and electricity duty. An expert advised referring to a specific discussion for further details, indicating that only the VAT component is eligible for a refund under the ROSL scheme.