Exporters make frantic efforts to protect interest
Exporters make frantic efforts to protect interest
In my previous articles I have explained how the exporters are least benefitted lot under GST. The refund mechanism is largely blocking their working capital thereby creating financial constraints. In the latest development, exporters and their representative bodies pleaded with the GST council to ease their woes
Recently, GST council held a meeting specially to address problems faced by exporters post GST. Exporters pushed for reforms in their favour by asking government for exemption from import taxes on inputs under popular schemes such as Advance Authorisation and Export Promotion Capital Goods.
They based their case on the fact that many countries like Canada, the EU, Vietnam, Indonesia and Australia that follow GST taxation already have these provisions to help their local exporters.
Apart from the exemption, exporters also seek to considerably fasten the refund process by proposing 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).
This would provide interim relief since their capital would not remain blocked for a long period of time.
Knowing that this relaxation could not sustain itself for long, the representative body themselves clarified that “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.”
Besides all the measures, exporters further asked to continue schemes like Merchandise Export from India Scheme and the Duty Drawback Scheme and there should be procedural simplification.
All these measures were demanded since after GST, efficiency of exporters has declined as GST works on the process of refunds. This creates acute shortage of funds.
“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 an exporter.
However, immediate solution to these problems should not be expected as all these recommendations of the committee will have to be first cleared by the GST Council, which now meets next month only.
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.
What remains to be seen is how the GST council will solve this problem because exports of a country like India should not be made to suffer like that.
We hope a strong and viable solution comes up soon so that exporters can breathe a sigh of relief.
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