No GST re­fund yet; work­ing cap­i­tal ar­range­ments be­com­ing cum­ber­some

Apparel Online - - India Canvas -

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.

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