FIEO pushes for change in GST act and procedures governing exports
Jul 27, 2017: Concern of exporters on liquidity, excessive documentation process and delays due to lack of knowledge on the part of both exporters as well as tax officials, etc were discussed by the participants in the Post GST Seminar held at Chennai recently. The seminar was organized by FIEO to take stock of the progress and implementation challenges after the implementation of GST.
Liquidity problems arise as the process requires payment of GST first while procuring the inputs and get refund subsequently after some lag. This also leads to blockage of working capital. While exporting also exporters needs to pay IGST or take exemption under LUT/Bond which increases compliance costs. Exporters have demanded an exemption mechanism instead of first paying tax and then claiming refund.
Ganesh Kumar Gupta, President, FIEO during the event said FIEO has sought help from Commerce and Industry Ministry in sorting out some of the problems of exporters. He said that the ministry has stated that needful will be done to settle the issues. FIEO President requested that entire refund mechanism for exporters should be brought into one window for reducing transaction time and cost. He hoped that the forthcoming review of Foreign Trade Policy will take into consideration all the issues and constrains faced by the exporters. Gupta also informed that FIEO has set up GST assistance cell in all its offices for helping exporters in this direction. He also said that competitiveness of Indian exporters will reduce by 2 percent due to interest burden on them.
A Sakthivel, regional chairman, FIEO (SR) said that there still needs to be clarity on a number of issues, export benefits being one of them. He said that the learning curve is going to be steep, at least for the next 3-4 months, hence next two quarters will be difficult for exporters. Sakthivel complimented the CBEC for announcing relaxation in filing of returns and compliances for first two quarters.
M Rafeeque Ahmed, vice president, FIEO raised the problem in claiming ITC refund as the same requires filing of GSTR which for July will be done by 20th September and thus claims will be delayed by over 3 months. He also urged to provide composite drawback rate on self declaration trusting the trade.
Ajay Sahai, director general & CEO, FIEO in his analysis on GST and International Trade said that GST will add to the competitiveness of exports particularly as logistics cost and time will come down after introduction of e-way bill. He assured that the problems of job work particularly regarding rates and interstate supply for job work are likely to be addressed shortly.
C P Rao, principal chief commissioner, GST & Central Excise, Tamilnadu & Pondicherry said that there were some initial hiccups and that the government has introduced a fast-track process for the refund of taxes and duties to exporters under which 90 percent of the duties will be refunded within seven days. The remaining 10 percent will be made after the verification of accounts by tax authorities.
