A Month On, Ex­porters Flood GST Cell with Re­fund Queries

The Economic Times - - Finance & Commodities -

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

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