Parliament panel seeks GST relief for exporters

PARL PANEL HAS ASKED THE FINANCE MINISTRY TO ALLOW EXPORTERS TO USE THE OLD SYSTEM OF REFUNDS THROUGH THE SOCALLED DUTY DRAWBACK SCHEME

NEW DELHI: Lawmakers have pitched for fresh concessions to labour-intensive exporting sectors such as textiles, leather, gems and jewellery to mitigate the compliance burden incurred in transitioning to the goods and services tax (GST) regime that was rolled out on July 1.

Accordingly, a parliamentary panel has asked the finance ministry to allow exporters to use the old system of refunds through the so-called duty drawback scheme.

The parliamentary standing committee on commerce sought the intervention, claiming that the GST compliance burden was causing job losses in labour-intensive export sectors.

Under the duty drawback scheme in the pre-gst era, exporters could claim rebates on taxes such as service tax and excise duty.

After GST was introduced, the government pared the duty drawback rates as exporters were supposed to claim refunds after paying taxes.

A member of the standing committee, which is currently studying the impact of the GST on the country’s exports, said on condition of anonymity, “Around 80% of the exporters in the labour-intensive industries are small exporters. They don’t want to get into the process of first paying duties and then seeking GST refunds. We are going to recommend to the government to just provide a realistic duty drawback to such exporters to take care of the embedded taxes they have to pay under the GST regime.”