Revenue secy-led panel to meet exporters today to address post-GST woes

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The Committee on Exports headed by revenue secretary Hasmukh Adhia will meet export promotion councils today to formulate a suitable strategy to aid the sector grappling with liquidity following the implementation of Goods and Services Tax (GST) from July 1.

This will be the first ever meeting of the committee after the announcement of its inception at the GST Council meeting in Hyderabad on September 9.  Representatives from eight export promotion councils will also be present to discuss the challenges with the government panel.

The committee will take up the issue of the delay in GST refund to exporters and a consequent blocking of working capital that has negatively impacted their liquidity, thereby escalating their tax burden.

Central Board of Excise and Customs (CBEC) Chairperson, CBEC Member (Customs), DGFT, GST Council Additional Secretary, Director General, Export Promotion, from the central government and commissioners of commercial taxes from Gujarat, Maharashtra, Karnataka, Uttar Pradesh and West Bengal are members of the committee.

In the pre-GST era, exporters would get ab-initio exemptions from duties, as per various schemes under the foreign trade policy. With the implementation of the new indirect tax system from July 2, exporters will now have to pay the duties first, while importing the raw material and seek refund after the finished good is exported.

As a result of this process, about Rs 1.85 lakh crore will get stuck with the government, as per industry estimates.

According to Federation of Indian Export Organisation (FIEO), exporters have stopped taking orders with least or no working capital at their disposal due to blockage of funds under GST and uncertainties looming large on refunds for the months of July to October, 2017.

Small and medium exporters are being hit due to delay in refunds, with the government extending deadline for tax return forms GSTR1, GSTR2, GSTR3 due to technical glitches on the IT portal Goods and Services Network (GSTN).