A week after meeting Revenue Secretary Hasmukh Adhia regarding issues related to Goods and Services Tax (GST) rollout, exporters and industry bodies met Finance Minister Arun Jaitley on Thursday for a speedy resolution of their issues. The main demands raised by exporters in their meeting included timely refunds, exemption from GST on goods purchased for exports and an extension of the duty drawback scheme beyond September 30.
The exporters and representatives of industry bodies also asked for a quarterly returns filing system than monthly returns at present and asked for refunds for exporters to be based on GSTR-3B, rather than GSTR-1, 2 and 3.
“Small exporters are particularly hit with GST as they have to borrow money to pay GST. Availability and the cost of credit is adversely impacting them. The government should consider introduction of e-wallet for exporters,” Federation of Indian Export Organisations (FIEO) President Ganesh Gupta told reporters after the meeting.
In the meeting, FIEO also asked for refund of embedded taxes on account of taxation on the products kept out of GST. “The availability of credit and cost of credit are the biggest challenges for the MSMEs which have become more alarming as money is borrowed for payment of GST on exports,” Gupta said.
Gems and Jewellery Export Promotion Council Chairman Praveenshankar Pandya said the sector is facing problems as exports are declining after the GST rollout. They also demanded exemption from Integrated GST (IGST) on procurement of precious metals from nominated agencies for the purpose of manufacturing and export of jewellery. “Small businesses are getting impacted more. Some have cut their productions also. We have raised the issue of compliance,” Pandya said.
The industry representatives also brought up compliance matters on which the finance minister invited suggestions to improve the GST implementation.
CII said that the GST regime should consider the continuation of earlier system, wherein purchase of goods was allowed without payment of tax on furnishing of a declaration form so that refund of tax is faster and capital does not get held up. Currently, the tax for inputs for exports is needed to be paid directly and then refund can be claimed. It also asked the government to look into delays in filing of GSTR 3 should be addressed for quick refunds of IGST paid on exports.
The exporters and industry representatives asked for a revision in the refund procedure. At present, the refund would flow to the exporters only after filing of GSTR-1, 2 and 3. FIEO in its representation before the Finance Minister said that the deadline for filing GSTR-1 for July has been extended to October 10, therefore, in case, the exporter wants to file for refund, he has to wait at least till October 10 as the auto-populated entries in GSTR-2 will be available only after that deadline. “Most of the exporters, particularly from MSME category, hardly have financial wherewithal to pay GST liabilities for 3 months without having refund in the meantime. In the given situation, exporters may be provided GST refund (both IGST as well as ITC) based on GSTR-1 & GSTR-3B so that the cash flow to export sector is maintained,” FIEO President Gupta said in his representation to the Finance Minister.
Institute of Company Secretaries of India (ICSI) Council Member Satwinder Singh said concerns related to reverse charge mechanism and refund were raised in the meeting. CII said that an increase in the threshold exemption for payment of tax under the reverse charge mechanism from Rs 5,000 at present to Rs 50,000 shall help ease burden of excessive compliances, especially for the MSME players.
Representatives from KPMG, CII, FICCI, Gems and Jewellery Export Promotion Council, Laghu Udyog Bharati, GST suvidha providers, ICSI, Institute of Chartered Accountants of India and Amazon were also a part of the meeting with the Finance Minister.