Cash-strapped carpet exporters ask Centre to release pending duty drawback claims, GST refunds

Amiti Sen New Delhi | Updated on June 08, 2020

Tough times Many carpet units have re-started work but business has shrunk to less than one-fourth of normal times.   -  Bloomberg

Oppose steep increase in air freight; seek government intervention

Carpet exporters, struggling to regain foothold in a global market disrupted by the Covid-19 pandemic and facing huge liquidity problems, have asked the government to expedite the release of pending duty drawback claims and GST refund payments.

In a recent virtual meeting with Textile Minister Smriti Irani, the sector also made a case for a cap on rising air freight charges and sought permission to hold a virtual global fair.

“Our duty drawback and GST refunds are pending for four-six months which has put a strain on carpet manufacturers who don’t have enough finances to carry on their businesses. We urged the Textile Ministry to ensure that the promise made to us earlier by the Finance Ministry for early release of the pending money is honoured,” said Siddh Nath Singh, Chairman, Carpet Export Promotion Council.

Singh pointed out that the Customs department was asking exporters to send their shipment agents to get the payment cleared which was totally unwarranted. “When export consignments are sent, the Customs officials check all document and goods before issuing the shipping bill. Why do they now need an agent to answer additional queries before releasing payment?” Singh said.

Since the government partially lifted the lockdown restrictions, many carpet units have re-started work but business had shrunk to less than one-fourth of normal times. “Our main buyers are the US and Europe. The US was already stressed due to Covid-19 and now it is also facing disruptions due to protests. Demand in Europe has also not been restored. Most units that are working are mainly delivering older orders,” Singh said.

Carpet exports fell a steep 90 per cent in April to ₹68.18 crore, against exports worth ₹744.67 crore in April 2019, because of the lockdown, according to government data. Last fiscal, the country exported carpets worth ₹12,000 crore but this year the figure could be significantly low. This could affect the livelihoods of an estimated 20 lakh workers and artisans.

Another problem faced by exporters is an increase in air freight charges following the lifting of lockdown restrictions. The CEPC said air charges had gone up three-four times and was making theircosts unsustainable. “The Minister assured us that the matter will be taken up with the Civil Aviation Ministry soon,” Singh said.

CEPC also urged the Textile Ministry to allow a virtual fair where global buyers can participate online and place their orders. “We are in a situation where foreign buyers are afraid to come to India and our exporters, too, don’t want to travel. One way for business to go on is through virtual fairs,” Singh said.

Published on June 08, 2020

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