AEPC hails hike in MEIS rates; demands pre-GST RoSL rates

The Dollar Business Bureau

Apparel exporters’ body, Apparel Export Promotion Council (APEC) has welcomed the Government’s move to double the rates of incentives under the Merchandise Exports from India scheme (MEIS) for readymade garments and made-ups.

Last week, the Directorate General of Foreign Trade (DGFT) has increased the rates for garments and made-ups to 4% from 2% of value of exports under the MEIS. The revised rates are effective from November 1.

Commenting on development, AEPC Chairman Ashok G. Rajani said, “We welcome the increase in the rates of MEIS. The enhancement in the rates will help in the fulfilment of orders for the Christmas festival as it will result in easing the blocked capital. It will help in the mitigation of the currency difference to some extent.”

“However, the industry is disappointed over the announcement of the rebate of state levies (RoSL) as the rate is far below than what the industry has recommended and there has been no consideration of the central taxes rebate in the announcement,” he added.

Post-GST rates of RoSL are up to a maximum of 1.7% for cotton garments, 1.25% for MMF (man-made fibre), silk and woolen garments and 1.48% for apparel of blends.

Rajani said that the industry is witnessing a slowdown with jobs being lost and buyers migrating due to high cost. Once the buyers find alternate resources it becomes difficult for us to get them back. Therefore, it is our humble submission to the government to urgently restore the previous rates of RoSL and duty drawback.

The apparel industry has been one of the worst hit by the GST as the industry was earlier on the optional route. Also, the industry comprises largely of SMEs who are finding GST compliances and capital blockage a severe strain on their bottom lines, APEC said in a statement.

Today, the industry faces a double whammy of reduced drawback and RoSL rates on one hand, and unchanged fabric and input costs on the other, besides this, the hardening of the currency has eroded the industry's competitiveness, it said.

Apparel exports from India has witnessed a decline of 39% in the month of October with an overall drop of 5.94%, as per the last export data.