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Exporters seek complete exemption from Payment of GST to save their business

Exporters 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.

Exporters, 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.

Exporters are likely to raise the issues of working capital and refunds which will be ploughed back into their business and the loss of interest.

Merchant 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 exporters.

They 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.

Certain 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.


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