Pending IGST refunds leave Tiruppur exporters in the lurch

LN Revathy Tirupur | Updated on January 04, 2020 Published on January 04, 2020

Over 250 exporters in Tiruppur have been categorised as “Risky” by the Customs Department. Industry sources told BusinessLine that the exporters were in the dark about “Risky Exporter Status” categorisation for a long time.

“The Risk Management Centre for Customs in Mumbai had identified some exporters as “Risky”, as they claim IGST refund (on FOB value) and the department had felt that the IGST claims were wrongly made. The issue came to the fore in June, and has remained unresolved for the last six months.

Working capital lost

“This has only resulted in complete erosion of working capital as IGST claims of over ₹500 crore have been locked up. The exporters are in dire straits,” an industry insider said, highlighting his plight.

Yet another exporter, preferring anonymity said that there were varied interpretations about this categorisation of “risky exporter”. Small exporters have been trapped, he added.

Exporters say that they are not against verification of the claims, but the delay has impacted their business operations badly.

Liquidity crunch

“We have been facing huge financial crunch since the roll out of GST. Withholding of IGST claims has further aggravated the issue. Non-release of IGST claims is the issue at this juncture,” the source said.

However, industry sources hope that some relief will come their way soon, particularly after their interaction with the Prime Minister last week.

The Apparel Export Promotion Council has, in the meanwhile, organised a meeting with the Commissioner of Customs, Tiruchi and Tuticorin at Tirupur on Thursday, specifically to discuss the issue of Risky Exporter status.

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Published on January 04, 2020
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