The Centre is going to release mid-term foreign trade policy (FTP) before the roll-out of the goods and services tax (GST) — which is expected to be effective from July 1 — so that their implementation is aligned with each other, commerce and industry minister Nirmala Sitharaman said on Saturday.
The minister said this after holding a meeting with various stakeholders, including exporters as a part mid-term review of FTP (2015-20), in New Delhi. “We found merit in the suggestion that the review of the policy should be well in time to go along with the roll out of the GST. It means I have to announce it well in time for July 1,” she said on Saturday.
The minister also said that no suggestions were made to scale down the 2020 export target of $900 billion, including services. Given the current economic and geopolitical situations globally, there are concerns that international trade could be impacted.
“Major suggestions discussed during the deliberations related to promoting rupee trade, facilitating not only exports but also imports and reducing cost of credit. Participants recommended harnessing the high foreign exchange earnings and large employment-generation potential of services related to the tourism, education and health sectors,” the commerce ministry stated on Saturday.
“Such services fall under the WTO category of the Mode 2 Services, also called the ‘Consumption Abroad’ category. It was emphasised that promotion of Mode2 in services sector shall contribute in domestic economic development and job creation,” the ministry statement added.
Sitharaman added that there were certain specific suggestions and questions for the GST Council that comprises state finance ministers, and is headed by the union finance minister Arun Jaitley. Therefore, she added that a team, including the commerce secretary Rita Teaotia, would seek time from GST Council on these specific issues — one issue is related to duty refunds of exporters.
Exporters, especially from the small and medium enterprises (SME) sector, have expressed concerns that their funds would be locked up for several months. As per the GST norms, 90 per cent of the refund will be given in 7 days and remaining 10 percent will be given in 4-5 months. SME exporters expressed concerns that their funds could remain locked for long time.
Regarding these concerns on issues relating to GST and its impact on export, the Sitharaman said that department of commerce has already taken up these issues with department of revenue, and assured that it will again take up these issues with revenue department for placing it before GST council to find a solution.