A Month On, Exporters Flood GST Cell with Refund Queries
Traders have to pay duty & then seek a refund which blocks a part of working capital; industry estimates exporters’ 1.85 L cr to get stuck with govt every year
New Delhi: More than a month after the government set up a cell in the commerce ministry to make exporters familiar with the recently introduced Goods and Services Tax, it is still flooded with queries, mostly related to refunds and blocking of working capital. “We get more than 50 GST queries on Twitter every day, almost a hundred emails and phone calls at various centres,” said an official.
The main concern of exporters is working capital getting locked up due to GST. According to industry estimates, over ₹ 1.85 lakh crore belonging to exporters will get stuck with the government due to GST every year. Prior to the implementation of GST, exporters used to get exemptionfromduties.Now,theyhaveto pay the duty first and then seek a refund, a process that ties up a portion of their working capital with the government and pushes up manufacturing costs.
Exporters have to arrange money for inputs, manufacturing and payment of duties and taxes. “Our members have informed us that it would be impossible for them to export in August and September as per this refund time schedule. We request the finance ministry to make GSTN (Goods and Services Tax Network) operative for processing returns and refunds,” EEPC India, the apex body for engineering exports, said in a communication to the finance and commerce ministries.
GSTN will operate a uniform interface for taxpayers and a common and shared IT infrastructure between the Centre and the states. The portal will provide an IT backbone for the smooth functioning of the GST regime so that the nation can be leveraged as one market with minimal indirect tax compliance costs.
The liquidity problem will reduce competitivenessofexportersby2%duetothe interest burden on them, according to Ajay Sahai, director general, Federation