addressing the exporters during the Outreach Program on GST organised by FIEO
at Mumbai Commerce Secretary Rita Teaotia said that GST has continued to evolve
over the last many months in response to some of the concerns which has been
flagged by the industry.
She said that the Department of
Commerce (DoC) has tried to
synchronise the mid-term review of the Foreign Trade Policy along with the roll
out of the GST. In the normal course, the review needs to be completed by September of this year but in order to
make sure there are no variance between FTP and GST. The DoC has geared up to
use the introduction of GST as the main instrument to spur the growth of
exports, as their will be low effect of duty on many of the items, reduction in
the cascading effects of multiple taxes despite the apprehensions felt by the
EXIM community ultimately resulting in lowering the cost and making our exports
more competitive. She informed that the MEIS and SEIS will continue but will be
aligned with GST. The DoC is reviewing the validity of the script period, the
export obligation periods to make them more realistic and tied up with GSTN
network so that there is a seamless process of extending benefit to the
Gupta, president, FIEO during his welcome address said that the exporting
community welcomes the introduction of GST and hopes to see a soft landing
during the transition period. To ensure that affects of GST gets absorbed
smoothly by the EXIM community, the GST Council has taken a deep insight into
various aspects of exports. However, few anomalies in the system that may
become a concern for exporters are being taken up with the GST Council from
time to time. Drawback rates may now only cover the basic customs duty on the
inputs. He requested that the DoC may pursue with the GST Council to provide
refund of CGST and SGST also through drawback so that complete tax refund both
of customs duty and indirect taxes is made available at one place reducing transaction
time and cost.
cautioned that the European, Canadian, Australian and South African suppliers
are enjoying exemption from GST under instrument akin to Advance Authorization.
However, Indian exporter will be required to pay IGST under Advance Authorization
for imports of inputs required for export production. This will affect the
liquidity of exporters. Hence, GST Council may consider providing exemption
from IGST under Advance Authorization to provide level playing field to Indian
exporters and to help in providing competitiveness to exports.
AK Bhalla, DGFT addressing the
participants said that the utilization of Duty Credit Scrips under the MEIS and
SEIS Schemes will be suitably aligned with the changes in the indirect taxes
under the GST regime and the validity period of the Duty Credit Scrips has been
changed from 18 months to 24 months to enhance their utility and attractiveness
in the GST regime. Value limit on the Free of Cost (FoC) exports for export
promotion for Status Holders has been enhanced across the sectors with a
special dispensation for the pharmaceutical sector. The threshold for reaching
two star export house has been reduced to USD 20 Million, thereby incentivizing
obligation period for the EPCG scheme has been reduced to 4 years. This is a
major simplification measure and will motivate exporters for early discharge of
their export obligation. The concept of block-wise maintenance of exports has
been discontinued. To provide relief to the exporters, applicants can now
choose either the preceding three years or preceding five years for calculation
of the average level of exports.
informed that DGFT has signed an MoU with the Goods and Services Network (GSTN)
for sharing foreign exchange realisation and Import Export code data. This will
strengthen processing of export transactions of taxpayers under GST, increase
transparency and reduce human interface.
Khan, Regional Chairman, FIEO (WR) initiating the program said that
introduction of GST would be a very significant step in the field of indirect
tax reforms in India. By combining a large number of central and state taxes
into a single tax basket which will mitigate the ill effects of cascading taxes
and pave the way for a common national market. Exporters will derive the
benefit of GST where Export taxation under GST would be zero percent and
exporters would get input credit.
DG and CEO, FIEO made a comprehensive presentation on Exports and Imports under
the new GST regime and highlighted the amendments and consequences change is
procedures for exporters, EOUís, SEZís, Job works, Deemed Exports etc.
outreach program was attended by representatives of the industry, industry
associations, Export Promotion Councils and other stakeholders.