Why is it in the news ?
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The Union Cabinet has approved the Scheme to Rebate State and Central Embedded Taxes to Support the Textile Sector.
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This will enable the Government to take various measures for making exports of apparel and made-ups zero rated.
More in the news
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At present, apparel and made-ups segments are supported under the Scheme for Rebate of State Levies (RoSL).
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However, certain State as well as Central Taxes continued to be present in the cost of exports.
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The Cabinet decision provides for a scheme to rebate all embedded State and Central Taxes/levies for apparel and made-ups which have a combined share of around 56% in India’s textile export basket.
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Rebate of taxes/levies has been permitted through an IT-driven scrip system at notified rates.
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The new scheme would come into effect when the rates are notified.
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It is applicable for apparel and made ups now and will be extended to yarn in the future.
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Benefits:(1) The proposed measures are expected to make the textile sector competitive.(2) Rebate of all Embedded State and Central taxes/levies for apparel and made-ups segments would make exports zero-rated.(3) It will boost India’s competitiveness in export markets and ensure equitable and inclusive growth of textile and apparel sector.
Textile Sector in India
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The Indian Textile industry is one of the largest in the world with a large raw material base and manufacturing strength across the value chain.
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Textile plays a major role in the Indian Economy1. It contributes 14% to industrial production and 4% to GDP2. With over 45 million people, the industry is one of the largest source of employment generation in the country.
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India is the largest producer and the second largest exporter of cotton in the world. India is also the leading consumer of cotton.
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The Textile sector in India is dominated by women workers, with 70% of the workforce being women.
Source
The Hindu.