‘Extend pre-GST drawback rates for exporters’

The Dollar Business Bureau

A parliamentary committee has recommended that the Government should extend the duty drawback rates for exporters that were prevailing prior to the Goods and Services Tax (GST) regime, until June 2018 or till the Department of Revenue comes out with revised rates.

While tabling its report in Parliament on the impact of GST on exports, the Standing Committee on Commerce chaired by Naresh Gujral said that this step will enable the exporters in overcoming the problems which they are currently facing besides this will also help them to take a long-term outlook while negotiating their export orders.

The Committee said that a formal mechanism must be put in place for redressal of grievance of exporters.

“In order to bring relief to the exporters, the Committee recommends that the Department of Revenue, Ministry of Finance extend the pre-GST duty drawback rates till June 30, 2018, or till such time the Department works out the revised duty drawback rates,” the report said.

The report said that withdrawing of the incentives which were extended previously under the scheme of Duty Drawback will lead to the fall of labour-intensive industries. In addition, this will have a cascading impact on livelihood and employment of poor workers of these industries.

The Committee also recommended that there is need to devise a simplified system for refunds filing which is in sync with the ease of doing business.

The refund mechanism for exporters under GST is tardy and cumbersome due to various operational issues, it said.

“For example, there was no interface between the technology platforms of GST Network (GSTN), which operates the main technology platform for filing of returns and payment of tax, and those of customs and the Directorate General of Foreign Trade (DGFT),” the panel pointed out.

And the GSTN did not get sufficient time for testing, it added.

The Committee is positive that the Government will take all remedial steps in the current taxation system for ensuring sustained growth of the country’s exports, the report said.