The Indian textile and apparel trade body, Tirupur Exporters Association (TEA) has welcomed the Government’s decision to extend the exemption of Integrated GST on the imports of machinery, under Export Promotion Capital Goods (EPCG) scheme, and inputs and raw material under Advance Authorization Schemes for a period of six months.
The decision was taken at the 26th GST Council meeting held on March 10, 2018. The extension period is valid up to October 1, 2018. Earlier, it was effective untill March 31, 2018, only.
“Blockage of Government receivables like ROSL and Duty Drawback including delay in getting GST refund resulted in the financial crisis for MSME units. This IGST extension decision has brought much relief to the Tirupur cluster which is looking for import of machinery especially MSME exporting units,” said TEA President Raja M Shanmugham.
However, he was a little upset as the Government did not entertain TEA’s demands to exempt payment of IGST for import of accessories as offered in the pre-GST era. Before the new tax regime, accessories were imported under Export Performance Certificate (EPC), issued by the AEPC (Apparel Export Promotion Council).
The issue would be taken up again by the textile body before Government to address the matter.
Notably, IGST, one of the three categories under Goods and Service Tax (CGST, IGST and SGST), is charged in case of movement of goods and services from one state to another. IGST falls under Integrated Goods and Service Tax Act 2016.
Authorities have fixed rates to share the revenue out of IGST between State Governments and Central Government.
IGST has been brought in place in order to ensure that a state has to deal only with the Centre in order to settle the interstate tax amounts.