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Business News/ Industry / Cabinet extends subsidy schemes for apparel, sugar
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Cabinet extends subsidy schemes for apparel, sugar

The central taxes covered are central excise duty on fuel used in transportation, and embedded CGST paid on inputs such as pesticides and fertilizer, among others

AAY families get sugar subsidy of ₹18.50 per kg per month. (Bloomberg)Premium
AAY families get sugar subsidy of 18.50 per kg per month. (Bloomberg)

New Delhi: The union cabinet on Thursday approved the extension of three schemes towards incentivising exports of apparel, providing sugar subsidy, and energizing investments in animal husbandry activities. It also approved the signing and ratification of a bilateral investment treaty with the UAE.

The scheme for a rebate of state and central taxes and levies (RoSCTL) for the export of apparel, and a sugar subsidy scheme for Antyodya Anna Yojna (AAY) families were extended for two years up to 31 March 2026. The animal husbandry infrastructure development fund (AHIDF) has been extended for another three years, also till 31 March 2026.

An official statement said the extension of the RoSCTL scheme will provide a stable policy regime to help in long-term trade planning, more so in textiles where orders can be placed in advance for long-term delivery.

RoSCTL compensates exporters by way of rebates for state and central taxes and levies in addition to the duty drawback scheme on the export of garments and made-ups. The levies include value-added tax on fuel used in transportation, captive power, farm sector, mandi tax, duty of electricity, stamp duty on export documents, embedded SGST paid on pesticides, fertilizers, among others used in production of raw cotton, purchases from unregistered dealers, and coal used in production of electricity and inputs for transport sector.

The central taxes covered are central excise duty on fuel used in transportation, and embedded CGST paid on inputs such as pesticides and fertilizer, among others.

Under the sugar subsidy scheme, the Centre gives subsidy of 18.50 per kg per month of sugar to AAY families of participating states. The approval is expected to extend benefits of more than 1,850 crore during the period of the 15th Finance Commission (2020-21 to 2025-26). The AHIDF, with an outlay of 29,610 crore, will incentivise investments in dairy processing and product diversification, meat processing and product diversification, animal feed plants, breed multiplication farms, animal waste-to-wealth management (agri-waste management), and veterinary vaccine and drug production facilities. 

On 26 January, Mint reported that the AHIDF would be extended for another three years with an outlay of 29,000 crore.

Meanwhile, the treaty with the UAE is expected to improve the confidence of investors, especially large investors, resulting in an increase in foreign investments and overseas direct investment (ODI) opportunities.

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Published: 02 Feb 2024, 12:08 AM IST
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