becoming effective from July, the Government is considering some incentives to
exporters as GST denies them some exemptions so far in existence.
“The Directorate General of Foreign Trade
(DGFT) is considering allocation of resources or ways to incentivise exporters
(after implementation of GST from July 1) in some manner,” a Senior Government
official said recently.
sought DGFT’s intervention as they fear that the proposed policy for tax
refunds after GST’s rollout will increase their capital cost, locking up large
amounts of funds till actual trade takes place.
advance authorization scheme of the Foreign Trade Policy (2015-20), exporters
get duty free import of inputs required for export production.
implementation of GST, these exemptions would cease to exist and the exporters
will have to pay Integrated GST (IGST) at the time of importing raw material
and intermediate products.
the GST Council’s proposal, exporters would get 90 percent of the tax refund
within six to ten days. In addition, an interest of about 6 percent will be
given to the exporters for any delay by the Government.
10 percent of the refund will be paid after the revenue department completes
the scrutiny of exports.
month, a team of Commerce Ministry officials including the Commerce Secretary
Rita Teotia had taken up this matter with revenue department. The department,
however, is not in favour of any exemptions once GST is rolled out, the
“Their argument is that the payments are in automatic mode.
The moment export happens, money gets into the exporters’ account. So there is
no locking-up period”, the Commerce Minister Nirmala Sitharaman said recently.
have been demanding exemption from payment of taxes under the GST as processing
of refunds generally takes few months, which will eventually block their
department also did not approve DGFT’s proposal to create an e-wallet facility
for virtual payment of taxes, under which a firm can pay taxes after a year or
at a time when goods are exported, or whichever is earlier.
further said that DGFT now has to carefully look at certain aspects before
finalising the incentives for exporters, especially the small and medium
“We will have
to see which exporter has a longer manufacturing cycle, or who is using more
money. In many cases, raw material could be procured locally. We will have to
see which categories of exporters are compulsorily importing raw material for
exports, which is not available in India and offer incentives accordingly,” the