The exporters have been thrown into very serious financial crisis due to
drain up of funds and are facing a
severe liquidity crisis as GST refunds are not coming forth as fast as it was
promised by the government, Dr A Sakthivel Regional Chariman of Federation of
Indian Exporters organisation FIEO said in a statement issued here on September
Prior to the launching of the GST regime, exporters are exempted from
payment of taxes on procurement raw materials/finished products for exports.
Simplified procedures governed exports wherein taxes were exempted as the
policy of the Government is not to levy taxes on exports along with their
However, after implementation of GST, exporters need to pay Input Tax
during procurement as well as while exporting pay tax and take credit or export
under bond/ LUT.
As per provision 90 per cent of the total amount claimed as a refund
excluding the amount of Input Tax credit will be granted provisionally within
10 days of making application within 7 days of issuance of acknowledgement of
However, in the case of input tax credit, as on date exporters were not
able to get refund as due date for filing returns has been extended and as per
procedure the refund will be provided to the exporters after matching the
returns filed by the supplier as well as purchaser.
In the present market conditions exporters cannot jack-up prices and cost
of export products increased to the tune of 3 to 5 per cent due to delay in
getting refund of GST paid. Strengthening of Rupee against the US Dollars also
added a blow to the exporters.
Several exporters are in the verge of closure due to draining of working
capital as blockage of fund on account of GST is exorbitant.
Hence, he requested urgent intervention of Union Finance Minister to
instruct the banks to provide “Bridge Loan” at soft rate of interest to the
exporters immediately towards GST refund receivable along with extension full
rate of duty drawback upto 31st December 2017 and also extension ROSL up to
31st December 2017.
Unless Government comes up with the
solution as suggested immediately, export sector will be thrown out of gear and
will become Non Performing Assets, warned Dr. Sakthivel.
Dr. Sakthivel also requested for intervention and support of Commerce and
Industry Minister as well as the Tamil Nadu government to help the exporters to
overcome this crisis.