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GST: Exporters to get 90% duty refund within seven days

Even though the crucial issues under the yet-to-be GST are unclear, the government has decided to refund within a week 90% of claims of exporters and the remaining 10% duty refund will be made after verifications by tax authorities.

In case the duty refund is not made in time, then, the" government will pay interest to exporters. However, it is yet to be decided how much interest will be paid to exporters in such a scenario,” Commerce secretary Rita Teaotia told the state ministers. The commerce secretary’s assurance satisfied exporters and the states.

This measure would bring immense relief to the exporters from cash crunch which they will have to experience since under the existing conditions the refund takes months. To this scheme of duty refund, it must be noted here, that " it will be possible if the states agree to the same, as exports are subject to the Integrated GST, which has both central and state GST components,” said S C Ralhan, president of the Federation of Indian Export Organisations.

The issue was raised at a meeting of state industry ministers under the Trade Promotion and Development Council, chaired by commerce and industry minister Nirmala Sitharaman.

The commerce minister said the commerce ministry has designed a new scheme called Trade Infrastructure for Exports Scheme (TIES) that will come into operation from the next financial year to support states to build export infrastructure.

The scheme, the exact details of which are still to be finalized, will replace the ASIDE (Assistance to States for Infrastructure Development of Exports) scheme that was discontinued by the centre in 2015-16, when states’ share in net proceeds of union tax revenues was increased to 42% from 32%, in line with the 14th Finance Commission’s recommendations.

However, the states are yet to agree to expediting refunds.

S.C. Ralhan, president, Federation of Indian Export Organizations, said exporters require the support of the states so that exports do not face the liquidity problems under GST.

“The Merchant Exporters, who at present avail exemptions through various forms, may be given the same facility under GST. We have many meetings with the Central Government but they feel it will be possible only if the States agree to the same as exports are subject to IGST which has both Central GST and State GST component. The exemption from IGST on the final product procured for exports would help in easing the liquidity as cost of credit in India is much above the international benchmark,” he said.

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