ASSOCHAM which has
more than 400 Chambers and Associations serving over 4.5 lakh members across
India has urged the government to help
exporters receive their tax refunds without any further delay, adding that the
govt must also ease rules for the GST administration on exports to sustain
listed several issues such as refund of GST paid on capital goods, export
obligations, transfer of drawback scrips and early clearances of
their dues on account of tax refunds for resolution by the GST Council and the
Finance Ministry, says a release.
“The growth in
exports has picked up, providing momentum which must be maintained by making
our goods competitive. We should fully tap the uptick in the global economy to
our advantage. It is pertinent to ensure that our exporters remain fully funded
and do not face any working capital shortage etc,” says ASSOCHAM.
chamber is engaged with the GST Council, Finance Ministry and tax authorities
for ironing out the GST roll-out issues.
It said that as
per section 16 of the IGST Act, the exporters have an option not to pay any
IGST on the exports and claim refund of the GST paid on procurement of inputs
and input services. However, no refund is available for GST paid on the capital
goods per section 54(8)(a) of the CGST Act. Since in case of exporters,
there is no output GST liability, this result in blockage of credit of GST paid
on capital goods, impacting the financial health of the exporters.
Also in the
GST regime, for non-fulfilment of export obligation on imports made during
pre-GST regime, while the importer is required to repay the customs duty saved,
including CVD and SAD component, its credit is not available in absence of
enabling provisions under GST law. This results in such CVD and SAD component
becoming a cost to such exporters in GST regime.
In the pre-GST
regime, the MEIS and SEIS scrips were allowed to be used to pay excise
duty/service tax on the procurements. However, similar facility is not
available under GST law and now the MIES and SEIS scrips can be used only for
making payment of the basic customs duty. Due to such restriction, the
exporters are not able to fully derive the benefits under these schemes and
this impacts their financial health.
significant amount of refunds pertaining to pre-GST period are yet to be
granted to the assessees. The refunds are stuck either due to delay in
processing of the refunds or in the litigations relating to
eligibility/procedural aspects for refund claim. This has caused significant
amount of funds blockage for the exporters.