“After
paying the GST four months in a row and without receiving any refunds, small
and medium enterprises are at a breaking point. There is an immediate need for
remedial measures to prevent a further decline in exports," said Ganesh
Kumar Gupta, president of the Federation of Indian Export Organisations.In the
GST regime, exporters have to pay taxes on realised profits upfront and then
apply for refunds.Exports grew for 13 straight months, peaking at over 25 per
cent growth in September, but then declined in October by 1.12 per cent.Gupta added that production had declined sharply in employment-intensive
sectors such as leather goods, jewellery and garments. Smaller industries such
as handicrafts and carpets, which are more sensitive to tariff and price
movements, have become unstable.The Export Promotion Council for Handicrafts is
preparing a proposal for a financial package for the sector, according to
officials.
The GST refund process has been delayed because the government extended the
date of filing the GST returns, according to the EEPC. The July refunds will
thus only be available in the third week of November. Exporters also
alleged that implementation of measures approved by the GST Council was slow.
They added specific difficulties in filing returns remained.Garment exporters had recently told a parliamentary standing committee that the
GST had not helped the sector.Under the GST regime, exporters have to pay taxes
on realised profits upfront and then apply for refunds Exports grew for 13
straight months, peaking at over 25 per cent growth in September, but then
declined in October by 1.12 per cent. The GST refund process has been delayed
because the government extended the date of filing the GST returns
The Export Promotion Council for Handicrafts is preparing a proposal for a
financial package for the sector.“The overall effect on apparel exporters,
especially SMEs, is burdensome due to a substantial increase in working capital
requirements and higher transaction costs," said Ashok G Rajani, chairman of
the Apparel Export Promotion Council.The body wants extension of the Integrated GST exemption on imports under the
Export Promotion of Capital Goods (EPCG) scheme and the Advance Authorisation
scheme from March 2018 to December 2018.However, some are hoping the
government’s decision to reduce the rate of taxation for a wide variety of
products would help shore up growth prospects. “The announcement by the Council
to bring leather goods and leather garments under the 18 per cent slab, from
the 28 per cent earlier, and finished leather to under 5 per cent slab, from 12
per cent earlier, is a big relief to our industry" Mukhtarul Amin,
Chairman of the Council for Leather Exports.
STORY IN
BRIEF
GST
still pummeling exports, say tradersMSMEs going through severe
liquidity crisis as tax refunds under GST regime still not materialisingSharp
fall across major employment-intensive sectors such as leather & leather
products, gems & jewellery, readymade garmentsAfter witnessing continuous
growth for thirteen straight months and peaking at more than 25 per
cent growth in September, India''s exports fell for the first time in
October by 1.12 per centTraders express concern over ''slow'' implementation
of measures approved by the GST Council back in October.
Source: DNA India, India Saturday, 18 November 2017