An amendment in the Integrated Goods and Services Tax (IGST) in the Finance Bill has left exporters across the country worrisome. They feel it will create liquidity crunch besides high cost and transaction time.
It is worth mentioning the Finance Bill has amended Section 16(3) of the IGST Act, which earlier provided the facility to an exporter to either export on payment of the integrated tax or without payment of the integrated tax. Those who were exporting on payment of integrated tax were getting IGST refund from the customs on shipment basis without any application in a faceless manner.
Now, with the amendment in place, the process of input tax credit would involve filing the claim, uploading the documents and then getting the payment. “This will lead to considerable delay in getting payment and may take anywhere between 3-4 months,” said SC Ralhan, an exporter and president, Ludhiana Hand Tools Association.
A fairly large number of exporters are availing the IGST payment facility and they prefer to pay the IGST since the refund was quick, it was a better option, he said. “The industry is already facing liquidity problem with the blocking of Merchandise Exports from India Scheme and Service Exports from India Scheme benefits from 2019 and the aforesaid change in the Finance Bill will deprive the exporters of the facility to export on payment of IGST and its subsequent refund in an efficient manner. This will only compound the cash flow problem,” said another exporter.
Perturbed over the situation, the exporters have sought the intervention of Finance Minister so that the facility of payment of IGST could be restored.