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.

[ABHISHEK TRIPATHI]

Dear Raveendran PM Ji,

Kindly refer

https://www.taxtmi.com/forum/issue?id=117092

AI Summary

Rebate of State Levies narrowed to specified VAT and electricity duties post-GST, affecting ROSL claim scope. The post-GST amendment to the ROSL scheme defines Rebate of State Levies as VAT on fuel used in transportation and captive power generation, mandi tax on cotton purchases, and duty on electricity used in manufacture accumulated from fibre to finished goods. This revision narrows ROSL refundable components to the specified VAT and related state levies, prompting the question whether a registered person can claim ROSL benefits alongside Input Tax Credit under GST.