Exim community awaits GST rules of business

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Exporters and importers are awaiting the finalisation of rules of business under the new goods and services tax (GST) regime. Currently, exporters are allowed duty-free import of goods used for manufacture of products. Under GST, they would have to pay the duty and then apply for refunds.

The Federation of Indian Export Organisations (FIEO) has said this will leave exporters, especially smaller enterprises, without enough working capital. And, a loss of export competitiveness.

The treatment of current incentive schemes, such as the Advance Authorisation Scheme and the Export Promotion of Capital Goods Scheme, have also been raised. Under GST, if exempt goods become inputs for products used finally for exports, export credits will not be provided for those products.

The commerce ministry had formed a three-member committee, including Commerce Secretary Rita Teaotia, to recommend on such issues to the Council. The government had promised refund of duty within seven days of getting a complete application. It later added a further step of acknowledging each claim within three days.

Commerce and industry minister Nirmala Sitharaman has said an additional six per cent interest would be given if payments are late. The last 10 per cent of refunds would be subject to verification by the revenue department.

FIEO president Ganesh Kumar Gupta said the interest on delayed payment would be received only after 60 days. “We request the government to provide interest on delayed refund after 10 days,” he said. “We are in talks with the government on a number of these rules which need to be finalised soon, especially since compliance norms are  getting much stricter and the majority of the sector is entering the taxation fold for the first time,” said Om Prakash Mittal, head of industry body Laghu Udyog Bharti.

These include the decision to reduce the tax exemption limit for small scale units from Rs 1.5 crore to Rs 20 lakh and phasing out of Cenvat credit from September. Industry has opposed these and talks are on.

Read more at: http://www.business-standard.com/article/economy-policy/exim-community-awaits-gst-rules-of-business-117060300056_1.html