Engineering Export Promotion Council of India (EEPC) has come up with issues which are not adjustable with context to the classifications of goods and several input tax credit anomalies. It may sound strange that even when the exports are kept aside from the GST ambit, it still have to pay the GST first and then claim it back with larger and complex procedure.
The GST will be levied on several engineering goods and out of those numerous are unclassified as of which category they fall within. Also noted down fact is that the payable GST will be much higher than the recently applicable tax rates in exports which will only increase the cost of shipments along with tension lines across the industry.
TS Bhasin, chairman of the engineering export organisations mentioned that “The biggest uncertainty would be the problem of classification of thousands of items manufactured by the trade and industry. Several items are capable of dual classification and there is no clear-cut distinction between the products.”
The EEPC India has also given a various presentation to the GST council in which they clearly showed how several items like hand tools, stainless steel articles and bicycles will attract much higher GST and the exporters will have to pay the cost which will ultimately make the task complex.
The chairman also mentioned that “The past experience of claiming refunds does not enthuse the exporters. We seek resolution of our issues by the GST Council with a strong support of the Finance and Commerce ministries so that the exports, the only bright spot of the economy, along with agriculture, are protected against any problems which may arise out of the new dispensation.” The rules and regulations say that only normal customs duty will be exempted while the GST i.e. IGST will have to be paid on the present CVD and an additional excise duty.
For this, TS Bhasin stated that “This will be a major blow for engineering exporters who import steel using AA, as Indian steel prices are much higher than international prices due to the protection is given to the steel industry. This would make this route also totally unviable and would mean a cash outflow at the time of import. Moreover, there is no clarity on EPCG(Export Promotion Capital Goods) as yet, With July 1 rollout having been announced, we are racing against time to get things resolved. Hopefully, the GST Council takes an exporter-friendly view.”
