plan to seek outright exemption on payment of goods and services tax (GST), citing
a crunch in working capital due to the uncertainty in the time taken to get
refunds for unutilized input tax credit. Several exports firms especially in
the hosiery and textile sectors are planning to fold up their units as they are
facing acute liquidity crunch.
heads of export promotion councils and senior officials from the commerce
ministry plan to submit a petition seeking the exemption when they meet the
Revenue Secretary on September 19 “There is an apprehension that exports will
decline, going ahead,” according to a
commerce ministry official.
are likely to raise the issues of working capital and refunds which will be
ploughed back into their business and the loss of interest.
exporters and those in the small and medium enterprises are up in arms, the
official said. Micro, small and medium enterprises now have to pay GST when
buying from merchant exporters. The government has a two refund mechanisms for
can furnish a bond instead of paying integrated GST and claim refund of the
unutilized input tax credit. This entitles them to get a 90 per cent refund
within seven days of acknowledgement of the application and the rest in 60
days. Alternatively, they can pay IGST and then claim the refund, which they
get within 60 days.
traditional sectors like textiles and gems and jewellery are suffering and need
special attention. A scheme offering higher duty drawbacks will end on
September 30 and many exporters don’t have the finances to pay for exports.