The Goods and Services Tax (GST) Council, which meets on Thursday, will take up the Commerce Ministry’s concerns over tax incentives for exporters, and the possible delay in payment of refunds under the new taxation regime that kicks in on July 1.

“I met the Finance Minister (on Wednesday) and gave him the details of what emerged after consultations between a committee of senior officials from the Commerce Ministry and Revenue Secretary Hasmukh Adhia (on concerns related to GST),” Commerce and Industry Minister Nirmala Sitharaman told BusinessLine in an interview.

According to exporters’ body FIEO, there are apprehensions about liquidity under the GST regime as exemptions currently enjoyed by exporters — on payment of additional customs duty and excise on imports of inputs used in exports — will get subsumed under GST.

Exporters’ costs could go up by up to 1.25 per cent (FOB value) once the GST is implemented, according to industry calculations.

The Revenue Department, however, feels the concerns are overstated. “Their argument is that the payments are in automatic mode. The moment export happens, money gets into the exporters’ account. So there is no locking-up period. Let us see what decision the GST Council takes when it looks into the matter,” Sitharaman said.

The Minister had set up a committee comprising former Commerce Secretary GK Pillai, incumbent Rita Teaotia and Director General of Foreign Trade Ajay Bhalla earlier this month following a review meeting with exporters and trade experts on the impact of the GST regime on exporters.

The concerns voiced by the committee were largely related to the treatment of tax incentives and the larger issue of refunds.

“There are strands within these two larger issues, which include concerns such as what is going to be the treatment of advance payment exporters have made and what is going to happen to the 10 per cent that is not refunded (within the stipulated time),” Sitharaman said.

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