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Exporters fold up business as they are under serious financial crisis due to delay in GST Refunds: Regional Chairman, FIEO

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 12.

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 products.

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 the application.

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.

 


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