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Needed change in GST rules and procedures governing exports – FIEO

Concern of exporters on liquidity issues, excessive documentation process and delays due to lack of knowledge on the part of both exporters as well as officials, etc were discussed by the participants in the well attended Post GST Seminar held at Chennai on July 25.

The Seminar was organized by FIEO to take stock of the progress and issues concerning exporters after implementation of GST from the begining of this month

Liquidity issues arise as the process requires payment of GST first while procuring the inputs and get refund/ adjust subsequently. This also leads to blockage of working capital. While exporting also exporters needs to pay tax or take exemption under LUT/Bond which increases compliance costs. Exporters have demanded an exemption mechanism instead of first paying tax and then claiming refund.

Mr. Ganesh Kumar Gupta, President, FIEO while inaugurating the session said FIEO sought help from Commerce and Industry Department in sorting out some of the problems of exporters who have assured FIEO that needful will be done to settle the issues.

The FIEO President requested that entire refund mechanism for exporters should be brought into one window for reducing transaction time and cost. He hoped that the forthcoming review of Foreign Trade Policy will take into consideration of all these issues and constraints faced by the exporters.

Now after initial hiccup, focus will be on returns and related documentation. FIEO Chief assured all support to the exporters for compliance related issue and said that FIEO set up GST assistance cell in all its offices for helping exporters in this direction. He also said that competitiveness of Indian exporters will get reduced as cost of products expected to increase by 2 per cent.

Dr. A Sakthivel, Regional Chairman, FIEO Southern Region said that there still needs to be clarity on a number of issues, export benefits being one of them. FIEO is getting queries from hundreds of exporters every day on the impact of GST on their business. we have been trying to answer them as best as we can. The learning curve is going to be steep, at least for the next 3-4 months. Hence next two quarters will be a difficult period again for exporters. Dr. Sakthivel complimented the Department for announcing relaxation in filing of returns and compliances for first two quarters.

Dr. Ajay Sahai, Director General, FIEO in his analysis on GST and International Trade said that the GST is severely denting liquidity of the exporter and the compliance cost of merchant exporter also gone up “Export competitiveness of India may increase by about 2 per cent and for some sectors where GST rate is higher will become more costlier. This will be a big blow for the exporters,” Dr. Sahai said. Dr Sahai provided clarification on various issues during his presentation.

Mr. C P Rao, Principal Chief Commissioner, GST & Central Excise, Tamilnadu and Pondicherry said that there were some initial hiccups and that the government has introduced a fast-track process for the refund of taxes and duties to exporters under which 90 per cent of the duties will be refunded within seven days.

The remaining 10 per cent will be made after the verification of accounts by tax authorities.  He assured that the government will explore all options to neutralise the impact of GST regime on the export sector. He also said that Govt. is very receptive and taking quick actions as and when issues are raised.

Shri M Rafeeque Ahmed, President, FIEO, , Shri Ajith  Kumar, Chief Commissioner of Customs, Mr. G Ravindranath, Commissioner, GST addressed the participants and clarified doubts.


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