NEW DELHI: The fear of liquidity crunch stemming from the delay in refund process under the GST regime dominated the recent meeting held by the Committee on Exports, headed by Revenue Secretary Hasmukh Adhia, with eight Export Promotion Bodies. The issues raised by the exporters are likely to feature prominently in the next GST Council meeting.
In its 21st meeting in Hyderabad earlier this month, the GST Council had decided to form a committee on exports to review issues faced by the exporters in getting tax content in exports neutralised and suggest remedies to the Council. While exports are in principle “zero-rated”, the GST regime prefers tax refunds than tax waivers. “If refund does not start flowing immediately then about `Rs. 65,000 crore would be stuck by the end of October. This will further deteriorate exporters’ liquidity situation,” FIEO Director-General Ajay Sahai said after the first meeting of the committee. Additionally, the gems and jewellery industry demanded exemption from integrated GST (IGST) on procurement of precious metals from the nominated agencies for the purpose of manufacture and export of jewellery.
Engineering Export Promotion Council board member PK Shah said with the ensuing festive season it is important that the authorities release at least 90% refunds soon after the shipments and complete verification and adjustment process at a later stage. Similarly, Council for Leather Exports Vice-Chairman P Ahmed said exporters are faced with challenging times due to GST and need immediate refund of taxes. During the meeting, the exporters are believed to have pressed for starting the refund process immediately based on GSTR-1 and GSTR-3B data. While GSTR-3B is the initial simplified returns which businesses have to file, GSTR-1 is the final sales return to be filed every month. The committee consists of CBEC member (customs),
DGF Director General, GST Council Additional Secretary, Director General, Export Promotion, from the Central Government and Commissioners of Commercial Taxes from Gujarat, Maharashtra, Karnataka, Uttar Pradesh and West Bengal.