Textile merchant exporters have heaved a sigh of relief with the Central government allowing them to pay a nominal GST of 0.1 per cent on the goods manufactured for exports.

The move will ease unnecessary blockage of working capital as, otherwise, exporters would pay the GST and wait for refunds.

Merchant exporters account for 40 per cent of overall textile exports from India.

After the roll out of GST, the government slashed duty drawback on garment exports to 2 per cent from 7.5 per cent.

Ujwal R Lahoti, Chairman, Texprocil, said the facility given to merchant exporters on goods manufactured for export will ensure that they do not face cash flow problems.

This apart, he said the measures exempting export promotion schemes such as Advance Authorisation Scheme and Export Promotion Capital Goods from GST till March-end should lead to a spurt in investments.

Complimenting Finance Minister Arun Jaitley for the far reaching relief given to the exporting community at the GST Council Meeting held last Friday, Lahoti said the government has tried to resolve exporters’ liquidity issues by ensuring that refund of GST paid in July and August will be done by October 10 and 18.

The Council also reduced GST on Manmade Fibre Yarn to 12 per cent from 18 per cent and Duty Credit Scrips to zero from 5 per cent to boost exports.

These measures would instil confidence in exporters and enable them to work towards achieving the export targets, Lahoti added.

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