Exporters will get quicker refunds and an e-wallet facility as the Goods and Services Tax Council eased rules to provide relief amid worries that a prolonged disruption could hurt the sector.
Exporters will get refunds for July by October 10 and for August by October 18, Finance Minister Arun Jaitley announced after the 22nd meeting of the Council today. They will also get an e-wallet with a notional advance credit, preferably by April 1, for refunds.
Exporters get a refund of taxes paid on inputs and shipments. They were worried that working capital could remain stuck for long after the government extended the deadline to file returns, delaying refunds.
The Council also decided that exporters will pay a nominal Integrated GST rate of 0.1 percent on merchant exports till March 31.
The move will come as a “big relief” for exporters, said Amit Goyal, president of the Confederation of Apparel Exporters.
The working capital blockage was a very major issue. Especially the 90 percent of the exporters are small and medium-sized exporters. And for them to have a three-month cycle of their working capital to be blocked, I think that was a big financial crunch on their workings.Amit Goyal, President, Confederation of Apparel Exporters
No tax was payable at the time of exports in the pre-GST regime. The nationwide tax brought in a levy, which exporters can claim as refund while filing returns.
Expediting post GST refunds, allowing Integrated GST exemption under Advance Authorization and Export Promotion Capital Goods schemes and to Export Oriented Units until 31 March 2018 is a huge relief for exporters, Harpreet Singh, an indirect tax partner at KPMG India said.
This not only avoids blockage of working capital but also reduces the compliance burden. Kudos to the government for listening to the voice of the industry and taking the right step at the right time.Harpreet Singh, Partner- Indirect Tax, KPMG India
With free flow of credits, lesser supply chain bottlenecks, better movement of goods and this new announcement, it would not be a surprise to see exports going uphill, he added.
Read all the highlights of the GST Council’s decisions here.
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