Commerce Ministry: Special Economic Zones & Export Oriented Units Issues Clarified

During the lockdown, some issues related to Special Economic Zones (SEZs), Export Oriented Units (EOUs), and some general policy have been put forward by stockholders and now on May 15, 2020, the Director-General of Export Promotion (DGEP) clarified all of them in a circular released by the Ministry of Commerce. The circular clarified several issues and the same are presented below:

The first issue on the circular was about the immediate refund of Input GST to DTA suppliers of SEZ Get to know the complete details of supplies given to SEZ under GST India. Also, we have covered GST rules, provisions and goods export to SEZ. Read more units and in some cases, it is still pending from 6 months and it is blocking stakeholder’s working capital. In this matter, DGEP stated that the list having this type of issue where the refund has not been sanctioned even after six months after the filing. So that the concerned field will be directed to take appropriate and necessary action.

The second issue was that the for GST e-way bill Step by step guide on GST E Way Bill registration on Govt. Portal. There are 3 types of registrations as Registered Suppliers, Registered/ Unregistered Transporters & Unregistered Suppliers. Read More, the extension of timelines is fixed but the process to obtain the permission of a designated nodal authority takes time and additionally due to the lockdown in which the movement of goods has been restricted, So, the timeline needs to be extended. The authorities cleared that “the request to extend timelines fixed for e-way bills has already been taken care of by CBIC with the issuance of the notification, wherein if the validity of an e-way bill generated under Rule 138 of the CGST Rules expires during the period between 20 March to 15 April the validity period of such e-way will be extended till April 30, 2020.”

A general policy issue was that at present conversion charges of foreign currency comes under GST to encourage the export of good and also to eliminate the cash flow problems for exporters, The GST needs to be reduced or eliminated, DGEP on this issue said that “Proposal for reducing/ eliminating GST imposed on foreign currency conversion charges has been flagged to JS (TRU-I) for examination.”

The Forth in the list was that EOUs, as an export promotion measure needs to be permitted ab initio exemption from GST, on this issue DGEP said there is no need to grant ab initio payment of Good and Service Tax (GST) on domestic pronounce by EOUs.

The fifth one is that As an alternative to the pending disbursal from the Government, refund of GST Get to know about official GST refund process under GST regime as finalized by the GST Council. We have included terms and conditions of all aspects. Read More, Income Tax, etc., commercial banks may be allowed to advance loans where the government will take care of the interest for such pending refunds. In respect to this general policy issue, the DGEP responded that “No basis/framework has been provided for this proposal of Government paying the interest against loan advanced by Banks in lieu of refunds of GST, Income Tax, etc. A concept paper may be provided in this regard for examination by CBIC.”