Apparel exporters facing liquidity crunch as refunds get delayed: FIEO President

Apparel and made-ups exporters are facing “acute” liquidity problem as huge amount of their funds are blocked under a rebate scheme for State levies and an export incentive programme, an exporters’ body flagged on Monday.

The Federation of Indian Export Organisations (FIEO) said that around 6,000 crore of duty refund claims have not been disbursed under the Rebate of State and Central Taxes and Levies (RoSCTL) and the Merchandise Export from India Scheme (MEIS) from March 7 last year and August 1, 2019, respectively.

The RSCTL scheme was not implemented in the entire 2019 and MEIS also stopped from August last year for apparel and made-ups sectors, FIEO President Sharad Kumar Saraf said in a statement.

“This is a fatal blow to the apparels and made-ups industry, which is one of the largest employment generation industry particularly supporting the women workers,” he said.

Saraf said that no funds have been disbursed since the announcement of the RoSCTL scheme from March 7 last year and the MEIS from August 1, 2019.

“This amount itself is nearly 6,000 crore. Most of the apparel exporters are from MSME sector and some of them are already in the process of closure and default,” he added.

He said that exporters of these products were surprised to see a gazette notification dated January 14 this year by the textiles ministry announcing one-time additional ad-hoc incentive of 1 per cent to offset difference between MEIS and RoSCTL from March 7, 2019, to December 31, 2019.

“This is completely contradictory to what was already announced by the government and factored by the industry to maintain their competitiveness in view of fierce competition. Many of them have paid statutory taxes also on RoSCTL and MEIS benefits,” he said.

The FIEO president said it is very “unfortunate” that the commitments are being “ignored”.