–– PR Aqeel Ahmed
the GST Council to resolve the exporters’ problem of blockage of working capital. He further stated that input tax credit and integrated goods and services tax (IGST) refunds for exporters were being expedited. He said the GST would be very beneficial for exporters in the long run, and added that the new regime will also curb tax evasion.
The highlights of the FTP Mid-term Review included “restoring the benefits under the export promotion schemes of duty free imports under Advanced Authorisation, Export Promotion Capital Goods and 100% Export Oriented Units, thus resolving the problem of blocked working capital for exporters following the roll-out of GST.” Export incentives under Merchandise Exports from India (MEIS) have been increased by 2% across the board for labour-intensive MSME sectors leading to additional annual incentive of ` 4,567 crore, the government said. This is in addition to already announced increase in MEIS incentives from 2% to 4% for ready-made garments and madeups in the labour intensive textiles sector, with an additional annual incentive of ` 2,743 crore.
Further, incentives under Services Exports from India Scheme (SEIS) have also been increased by 2% leading to additional annual incentive of ` 1,140 crore. A new scheme of self-assessment based, duty-free procurement of inputs required for exports has also been introduced. A state- of-the-art Trade Analytics division has been set up in the Directorate General of Foreign Trade for data based policy actions. The initiative envisages processing trade information for specific policy interventions. Besides, a new Logistics Division has been created in the Department of Commerce to develop and coordinate integrated development of the logistics sector. Support to Export Credit Guarantee Corporation is also being enhanced to increase insurance cover to exporters, particularly MSMES, for exploring new or difficult markets, an official statement said.
In addition, the validity period of Duty Credit Scrips has been increased from 18 to 24 months and GST rates on transfer/sale of scrips has been reduced to zero. Issue of gold availability for exporters has been resolved by allowing specified nominated agencies to import gold without payment of IGST. The mid-term review of the foreign trade policy (FTP) was earlier supposed to be released before July 1, in line with the introduction of the goods and services tax (GST). However, it was put off as the government wanted to factor in the feedback from exporters based on their experience of the implementation of GST.