Exporters to get tax refund within 10 days
The Goods and Services Tax (GST) Council has accepted the commerce ministry’s suggestion of refunding 90 per cent of exporters’ claims on incentive schemes within 10 days of applying for them.
However, the Council, which had met on Thursday and Friday in Srinagar, is yet to take a decision on allowing a different mechanism of claiming incentives for exporters belonging to medium, small and micro enterprises (MSME), Commerce and Industry Minister Nirmala Sitharaman said on Saturday.
The ministry had argued for exempting the sector from paying duties, since it would be difficult for such firms to go without crucial working capital for long.
“On the refund issue, our request to the GST Council was that for MSMEs, if an alternative could be thought of, rather than asking them to pay first and then get a refund. We are yet to hear from them,” Sitharaman said, addressing a press conference on three years of the government. Exporters are now allowed duty-free import of inputs that are used to manufacture export products. However, under the GST regime, which is expected to be rolled out on July 1, they will have to pay the duty and then apply for refunds.
Subsequently, they had argued that significant working capital would be locked up in the new system.
While the government had earlier promised that the duty would be refunded within the first seven days of submitting an application, it had added a further step of acknowledging each claim within three days, Director General of Foreign Trade Ajay Bhalla said.
Provisions have been made for additional refunds of 6 per cent if payments are late. The last 10 per cent of refunds would be subject to verification by the revenue department.
The issue was referred to the GST Council by a special three-member committee including Commerce Secretary Rita Teaotia; the head of the committee on duty drawbacks, GK Pillai; and a finance ministry official.
It had also raised the issue that under the GST, if exempt goods were inputs in making products used for exports, export credits would not be provided for them.
Sitharaman also said the government was considering creating spice development agencies at the state level to boost the working of the Spices Board. On this note, it is looking at spice development parks in Telangana and other states.