Reflective cracking is one of the major distresses found on newly laid overlays. Several rehabilitation techniques have been introduced to reduce the effect of reflective cracking. Commonly used method of surface treatment is by the introduction of interlayer systems. Geosynthetic interlayer system is most effective due to its ease of installation and improvement in service life making it superior to the other interlayer systems. The geosynthetic mechanism to retard the reflective cracking is not completely understood due to its complexity. The finite element model package, ABAQUS, is employed to study the initiation and propagation of crack through the hot mix asphalt. The finite element algorithm written in ABAQUS, called eXtended Finite Element Method (XFEM) is found to be an effective solution and user friendly. Hence, in the present study, a single edge notched beam test is modelled using XFEM for simulating the crack propagation mechanism along with all the other required material parameters for numerical modelling. The HMA beam is analysed as a viscoelastic material as it is more realistic to the field behavior. Based on the basic tensile properties of natural geotextiles like coir and jute, the effect of these materials in reducing reflective cracking has been analysed. The results show that there is an improvement in the crack retardation due to the incorporation of geosynthetic interlayer system.