‘Exporters are facing extreme cash flow problem because of locking up of the GST refunds with the authorities’
New Delhi: EEPC India, the Engineering exporters' apex body, has urged the Government to intervene and push for release of at least 90% of GST refunds to exporters immediately after the shipping bills are filed with the authorities.
In a statement issued to the Government, EEPC India Chairman T S Bhasin said, "We strongly recommend a 'war room' for exports as well as suggested by the Commerce and Industry Minister Suresh Prabhu for foreign investors.”
Expressing confidence in the newly appointed Minister, he said Prabhu should intervene with the Finance Ministry and the GST Council and get a relief in terms of release of at least 90% goods and services tax (GST) refund on submission of the shipping bills, if a complete GST exemption is not feasible.
The trade body said that, “while the Government has extended the dates for filing of July returns for GST to September 10, 25 and 30 and for August to October 5, 10 and 15, ironically, it would mean blocking of the refunds for exporters, who are in any case hard pressed for cash and have been significantly disadvantaged by continuous rise in value of rupee against the US dollar.”
According to the data released by the Ministry of Commerce, engineering exports in the month of July was
$5.17 billion. Based on the same, calculations for the GST refunds for July would amount to approximately Rs 1,520 crore which would be held up till the third week of October for July.
"If the Integrated Goods and Service Tax (IGST), paid by exporters, is added, the dues to the exporting community would be in excess of Rs 1700 crore for July itself. Such a dispensation would certainly add to our costs and make our exports that much uncompetitive," Bhasin said.
He said exporters are facing extreme cash flow problem because of locking up of the GST refunds with the authorities.
In view of this extraordinary situation, we urge the Government to give bulk of the refund to exporters immediately based on the shipping bills that have been filed with the Indian Customs Electronic Commerce/Electronic Data interchange Gateway (ICEGATE), the apex body said.
EEPC suggested that the verification and adjustment can be done later based on the filing by the exporters as per their respective GST filing and returns.
"This will help small and medium scale exporters to tide over the blockage of funds and allow them to pay the salaries and bonuses of their workers in the festival season.
"The members have pointed out that they are in a desperate situation and hence Government must intervene to avoid a mini social crisis," EEPC said.