No GST refund yet; working capital arrangements becoming cumbersome
Apparel Online talked to 30 apparel exporters across India and discussed the GST refund issue. All of them unanimously echoed in similar voice: “This is one of the worst issues so far that we have seen in our business.
None of us received any refund so far.” Though nobody is allowed to mention how much amount is blocked in this, most of them have said that it is a huge amount as they are depositing GST for the last 6 months. As majority of exporters are from SME segment, they are really facing heat.
When an exporter, dispatches a shipment of Rs. 1 crore, he has to deposit Rs. 5 lakh as GST.
Since October 2017, exporters are depositing GST, so there is blockage of funds from say last five months. As per AEPC, the total ITC Credit and IGST which is blocked till date is of Rs. 4,097 crore. It is like a vicious circle for exporters…, as those who are still having good orders have deposited large amounts, and further need more money to complete orders. Exporters are forced to delay the payment of their suppliers as they don’t have funds. Some buyers are not giving advance as they used to give earlier, which is again a problem. So overall, such exporters are facing huge shortage of working capital.
Many exporters have increased their bank limits, but it was not easy for them as banks are not supporting them. Some exporters also claimed that they have almost utilized their increased limit.
Few exporters commented, but on the condition of anonymity, that as their bank’s limit cannot be increased further, they are forced to take loan from their own resources, but which is again costing them very high compared to bank rates. And in the current scenario, any extra penny pinches a lot. Though a month ago, Amitabh Kant, CEO, NITI Aayog assured to apparel exporters to take some initiative in this regard but nothing has been done so far which can give immediate relief to the exporters.
Rajeev Bansal, MD, Celestial Knits & Fabs, Noida and Divisional Chairman of Indian Industries Association (IIA), who is very much involved in GST matters and has been keeping a keen eye on such developments, shared that exporters do need to speed up process at their end as many fellow-exporters delay in filing the GST. “Even after filing, some documents remain missing. No doubt, there is lot of paper work, and even officers are still not very much familiar with the process. But Government has intention to streamline the process and hopefully from
April, we will be getting refund,” he concluded.
As per AEPC, the total ITC Credit and IGST which is blocked till date is of
Rs. 4,097 crore. It is like a vicious circle for exporters…, as those who are still having good orders have deposited large amounts, and further need more money to complete orders.