The government has again extended the tax exemption for one year till March 2020 to all the exporters under small and medium-sized units (MSMEs), exempting them to pay integrated goods and services tax and compensation cess.
Further, they have been also granted the authorization to utilize certain promotional scheme such as the Advance Authorisation scheme, Export Promotion Capital Goods Scheme and Export Oriented Units scheme.
Raja M. Shanmugam of the Tirupur Exporters’ Association (TEA) said they have urged the government for the extending the period of tax exemption via many representations while pointing the fact that the payment of IGST for import of machinery under EPCG scheme does not carry any refund later as these goods are capital goods and so the expenditure incurred on them does not qualify any refunds and this led to the need for extending the exemption period. He said a number of exporters, including knitwear makers, import the machinery to meet the requirements of buyers.
Shanmugham said, “After implementation of the GST, TEA had requested for exemption from the payment of IGST while importing capital goods under the EPCG scheme or inputs like speciality fabrics under Advance Authorisation scheme”. “Considering the need, the government permitted for exemption from payment of IGST for a period of six months on each occasion,” he added.
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The foreign trade policy (2015-2020) regulates and aims to upsurge the exports of goods and services and motivate the “Make in India” programme while creating employment opportunities for Indians. The Policy foresees India responding well to the challenges of the external environment with the rapid evolvement at the international trading platform for which it has introduced some schemes.GST council have extended the relieves under these schemes.
An Advance Authorisation is issued to allow duty-free import of inputs, which are physically incorporated in an export product.
EPCG is an export promotion scheme under which an exporter can import a certain amount of capital goods at zero % tax for the technological advancement to boost exports.
The Export Oriented Units (EOU) scheme was formed to breakthrough exports, attract foreign earnings and generate employment.
Steps taken by the government for boosting the exports is always rewarding to the exports, importers and countrymen. This can be seen clearly through the data collected for the last F.Y.
During April-February of the current F.Y., exports showcased the growth of 8.85 percent to $298.47 billion, with the increment in imports by 9.75 percent to $464 billion. The trade deficit has widened from $148.55 billion of the previous F.Y. to $165.52 billion during the 11 months of the current F.Y.
Exemption of IGST on Import capital goods for exports and Multiple promotion schemes with compensation cess till March 2020 serves reliefs to benefit SME exporters, especially those importing machinery. This will definitely, help India progress in the International market, benefit the exporters and create numerous employment opportunities.
