Commerce and industry minister Nirmala Sitharaman said on Saturday a committee set up by her ministry will take up the concerns of exporters regarding an expected increase in fund requirement under goods and services tax (GST) regime with the council headed by finance minister Arun Jaitley and comprising all states, while promising to rework the Foreign Trade Policy from July 1 to bring it in sync with the new tax regime.
After consultations with experts on the mid-term review of the five-year trade policy, the minister told reporters that a committee comprising former commerce secretary G K Pillai, who heads a committee on duty drawback, commerce secretary Rita Teaotia and DGFT A K Bhalla had been tasked with taking up the matter with GST Council, which is due to meet later this month.
Exporters as well as the commerce department are worried over the current refund process. Under the new regime, GST will have to be paid upfront and only after the shipment moves out can an exporter claim a refund. Of the total dues, 90% of the taxes are to be refunded within a week, while the remaining will come later with a provision for 6% interest on delayed payment. “Exporters, especially small and medium enterprises, will find money getting locked up,” Sitharaman said with officials adding that this will increase the working capital requirement.
The second concern relates to exempted goods such as farm products, which are used as inputs where input credit will not be available since no taxes would be paid. “The GST Council should look at the specific problems and tell us a way on how to fill it up with scrips or something,” Sitharaman said.
Source : TOI