Exporters up in arms against GST levy on ocean and air freight

The Cochin based Kerala Exporters forum has demanded that the central government withdraw the proposed measure to levy Goods and Sales tax on International out bound Ocean freight and air export freight with effect from October One.

The forum has a sent a representation to the Union Ministers Ms Nirmala Sitaraman (Finance) and Mr Piyush Goyal (Commerce and it says the proposed measure would add to the burden of exporters at a time when Indian products are facing a tough challenge in the international market due to the price factor with recession looming large

The commerce ministry has issued an order imposing 5 per cent GST on international outbound ocean freight and 18 per cent GST on air export freight with effect from October 1

The global trade is passing through a very difficult phase due to high inflation and recession which have affected the demand. India’s exports have shown a downward trend during the April-August period. Exporters of perishables including fruits and vegetables get only moderate revenue due to the fluctuating market. At this time, the decision to impose GST has affected our liquidity, the form saidi.

The Overseas freight charges have gone up by 250 per cent compared to the pre-Covid rate. The payment of GST on freight charges will affect the liquidity of exporters as the interest rates have also increased with the Reserve Bank revising the repo rates. The forum members have plans to meet Union minister Goyal on October 18th in a bid to convince him about the issues faced by the exporters.

At a time when high freight charges and global recession are posing a tough challenge, the decision of the Union government to impose GST on international outbound freight has landed the exporters in a quandary the forum said.