New Delhi, July 31 (KNN) As Government is considering to replace Merchandise Exports from India Scheme (MEIS) with a new duty refund scheme called Rebate of State and Central Taxes and Levies (RoSCTL), GEMA, which is north India's biggest apparel association has sent a representation to the Government appealing not to discontinue MEIS.

In a representation sent, the Garment Exporters & Manufacturers Association (GEMA) said that the consideration of RoSCTL as a substitute to MEIS is unjustifiable. The two should be seen independent of each other.

It may be noted that ROSCTL, which is a reimbursement of taxes already paid by the industry, is not similar in scope or role of MEIS and hence should not be considered as a replacement of the same, said GEMA.

Also, with ROSCTL yet to be rolled out and backlogs of more than 8 months reported by a lot of smaller players, there is already a working capital crunch in the industry, it added.

“A discontinuation would aggravate these challenges for Indian exporters and render them competitive. I strongly request the Government to continue the MEIS Scheme as the apparel sector has recently recovered from a long spell of stagnation”, said Animesh Saxena, General Secretary of GEMA.

Requesting Government that MEIS for Garments (HS Code 61& 62) should be continued with the existing rate of 4% until such time alternative WTO complaint scheme is formulated and implemented, he said RoSCTL scheme was introduced to provide reimbursement of Central and State Taxes to ensure that the taxes are not exported along with the products. RoSCTL is not an export subsidy Scheme.

Therefore, introduction of RoSCTL should not trigger withdrawal of MEIS, rather alternate Scheme should be devised which is WTO complaint, he added.

The association reiterated that MEIS helps Indian exporters retain the level playing field in the competitive export market and overcome certain challenges and inefficiencies which continue to be faced by them.

With over 15% cost disadvantage on account input cost differentials, logistic disabilities and market access disadvantage vis-a-vis competitors, the rationale for continuation of MEIS is strong. Not only will dilution of the MEIS support jeopardize the present order book positions, but it will lead to India losing out to Bangladesh and Vietnam in several competing categories, it added.