The commerce ministry is looking to help the exporters, suggesting the finance ministry to take a soft action towards the export industry and continue with GST exemptions which were earlier granted.
The commerce ministry showed that exporters would have to go through a typical procedure of paying tax and then claiming refunds under the GST, would be a great obstacle and can hamper the growth meanwhile.
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The previous procedures have directed towards the simplified process, however, the taxation should be done in the first place after the claiming of funds would be a hectic cycle and lock the working capital of most of the exporters deteriorating whole business unit.
Federation of Indian Export Organisations (FIEO) Director General Ajay Sahai said, “Export sector is worried about the implication of GST on exports, the definition of exports in the Model GST law is at variance with SEZ Act, We need to synchronize the two to avoid any dispute. GST would also require suitable changes in many of the Schemes in the Foreign Trade Policy.”
He added, “for exporters, the facility of duty-free imports/procurement of inputs for exports should continue else it will lead to increasing requirement of working capital even for payment of IGST, CGST, and SGST. “This will hit MSME as their cost of capital is quite high, blunting their competitive edge in exports. The exemption will not lead to any loss of revenue as in any case exporters will be entitled to the refund which affects their liquidity,”
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As per the current statistics, the India’s exports figure are in a deficit right now, since 2014 December. In June this year there was a positive scenario for the exports and it gets back down again in July and August.
The GST regime is held to be the most significant taxation norm in the Indian reformation, as it will subsume all the indirect taxes and would simplify the process of tax. The Govt. has planned to apply the GST on 1 April 2017.
