Exporters facing difficulties post-GST due to late drawback refunds: EEPC

The Dollar Business Bureau

Engineering Export Promotion Council (EEPC) of India said on Monday that after the implementation of Goods and Services Tax (GST), shipping companies are facing problems as their refunds for drawback will not be issued till end of September or October.

In addition, the supply of goods from domestic tariff zones (DTZs) to export-oriented units (EOUs) are not taken as ‘deemed exports’ under the new tax regime, which resulted in denying duty free imports of inputs under the Government’s scheme of Advance Authorisation, EEPC said in a statement.

Moreover, the exporters will be paying basic customs duty, Integrated GST and cesses for the goods imported that are used for supply to EOUs. The exporters are entitled for input tax credit of IGST only. The basic customs duty and cesses are an additional cost for them.

“In fact, several schemes for giving a boost to exporters by the Commerce Ministry have been turned upside down and their functioning has become extremely difficult or not viable,” said T S Bhasin, Chairman, EEPC India.

Engineering goods exports account for the largest share in overall exports from the country and are thus, crucial for generation of jobs, mainly in the small and medium enterprises (SMEs) segment.

“Our members have informed us that it would be impossible for them to export in August and September as per this refund time schedule. We request and kindly urge the finance ministry to make the GSTN operative for processing returns and refunds by the beginning of August,” the exporters’ body said in its communiqué to the Commerce and Finance Ministries.