In Hyderabad, the GST council had a meet, and on this meet, for export purposes, the rate of tax on goods that have been procured has been made 0.1%. The merchant exporters also will be charged 0.1% tax.
As the payment of GST had to be done for inputs, the Council accepted two proposals, so the released official statement told that for cutting down the cash blockage exporters were facing. As per the statement, one for instant relief and the other for providing long-term support to exporters. By extending the advance authorization (AA)/ Export Promotion Capital Goods (EPCG)/100 per cent EOU schemes, immediate relief is being given to sourcing inputs from abroad as well as domestic suppliers.” As per the statement, on imports, the holders of AA/ EPCG and EOUs will not be liable to pay IGST and cess. Also, domestic supplies to owners of AA / EPCG and EOUs would be handled as considered exports…and the return of tax compensated on such supplies given to the supplier.”
Also, to import gold without payment of IGST some specified banks and Public Sector Units will be permitted. The statement also added that this can then be supplied to exporters as per a scheme similar to AA.
This move has been appreciated by the Exporters body Federation of Indian Export Organisations (FIEO) as the vendor exporters play a role to more than 30% of country’s exports and have small margins between to 2 to 4 %. FIEO stated that as they had to pay the tax and then seek a refund after some time gap, the GST levy, particularly in the case of products with higher rates, had totally shaken the exporters’ costing.
So as to provide more liquidity to the exporters, the E-wallet facility is being planned to be available from 1st April. For the proper functioning of the e-wallet, the Directorate General of Foreign Trade (DGFT) will prepare norms. As to pay taxes they are forced to borrow money to pay the taxes, the micro and small exporters are burdened by GST in particular, said by FIEO. The e-wallet will help the exporters from getting impacted by the cost of getting credit for payment of taxes, so FIEO had requested the government to consider providing.
The declaration informs that under the e-wallet maintaining previous year’s exports in concern, a normal GST amount will be measured and e-currency will be acknowledged to exporter’s account. When duty paid supplies have to be procured and the amount may be credited back when the export proof is provided, it will function as a running account.