After the plea of commerce and Industry minister Nirmala Sitharaman on the issue of exporters, refund duty which takes a long time than normal has been considered in view of traders blocked revenue for investments. The issue was raised in the eighth meeting of the GST council while the quick reaction of the request is what takes an attention.
While the decision was taken of returning a total of 90 percent of the taxes paid by the dealer’s traders and exporters and rest of 10 percent would be returned after the checking of sources and other validations by the tax governing authorities.
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Commerce secretary Rita Teaotia said that ICEGATE portal is the main tool which will help the taxes to reach on time also assured the dealers that the relative compensation will be provided if the action is not completed as promised. She said that “If duty refunds could not be made within seven days, then the government will pay interest to exporters. However, it is yet to be decided how much interest will be paid to exporters in such a scenario.”
Earlier the taxes were paid when the transaction is held while all the returns were done after the transaction which leads to cash shortage for the exporters to support any other activities of the organization of manufacturing. So, in this panic situation, the decision has been taken in the favor of exporters as said by Rita Teaotia, “GST clearly provides that taxes must be paid and refunds will be provided. So since the regime is so structured, in order to ensure that there is a minimum pain to exporters, duty refunds will be provided within a week’s time.”
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In this significant step taken by the finance ministry, S.C. Ralhan, president, Federation of Indian Export Organizations added that “The Merchant Exporters, who at present avail exemptions through various forms, may be given the same facility under GST. We have many meetings with the Central Government but they feel it will be possible only if the States agree to the same as exports are subject to IGST which has both Central GST and State GST component. The exemption from IGST on the final product procured for exports would help in easing the liquidity as the cost of credit in India is much above the international benchmark.”
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