Exporters seek early refund, exemption under GST

Our Bureau New Delhi | Updated on January 27, 2018

Revenue Secretary Hasmukh Adhia


First meeting of GST Council on Exports deliberates on grievances

In the first meeting of the GST Council on Exports chaired by Revenue Secretary Hasmukh Adhia, exporters made a case for exemption from import taxes on inputs under popular schemes such as Advance Authorisation and Export Promotion Capital Goods. They argued that many countries with a robust GST regime such as Canada, the EU, Vietnam, Indonesia and Australia provided such relaxation.

Exporters have also proposed that Integrated GST (IGST) refunds should be made on the basis of GSTR-3B, which has now been filed by most of them for the month of July. The government could later reconcile it with the actual invoices when detailed filing of returns is done (GSTR-1 and GSTR-2).

“We want refunds to be given on the basis of GSTR-3B only as an interim mechanism till things get settled down and filing of returns happen on time without extensions. Then automatically our refunds would also happen on time,” an exporter who attended the meeting told BusinessLine.

Incentive schemes such as Merchandise Export from India Scheme and the duty drawback scheme should also be allowed to continue under GST and there should be procedural simplification, exporters said..

“Earlier with a bond and LUT, we could continue exports. But now all our working capital is locked up and the wait for refunds is endless,” said another exporter who did not wish to be named.

Exporters said the Finance Ministry officials responded positively to the proposal of exempting from import taxes inputs under schemes such as AA and EPCG. “Earlier they were not willing to consider the proposal at all. But now that they were given details of other countries who were providing such exemptions, they promised to consider it,” the first exporter said.

Council’s clearance

However, an immediate decision by the government is unlikely and all recommendations of the committee will have to be first cleared by the GST Council, which now meets next month. Officials did not rule out an emergency meeting through video conferencing, if required.

“The Revenue Secretary has been apprised of the cash flow problem as the refunds for the August exports would be available only in December with a cascading effect even on the refunds for September,” PK Shah, Former Chairman & Currently Board Member, EEPC India.

The EEPC has also asked the authorities to release at least 90 per cent refunds immediately after the shipments and let verification and adjustment be done at a later stage

Meanwhile, along with simplification in norms and faster refunds, the Council for Leather Exports has also called for rate reviews under GST. “GST on job works should be lowered to 5 per cent and on leather garments and goods to 18 per cent,” said PR Aqeel Ahmed, Vice-Chairman, Council of Leather Exports.

Published on September 19, 2017

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