Exporters across India fear liquidity hit after GST exemption ends on export freight at the start of the month.
From 1 October, GST on ocean freight will have to be paid at 5 per cent, while exports by air, billed to customers in India, attract 18 per cent levy.
The Government’s move, exporters believe, will shrink liquidity at a time when they are dealing with weak demand in advanced countries, prompting them to seek a re-look.
The Government officials argue that there was no need to extend the benefit, given that the refund process has become easier.
The exporters are of the view that it can take up to three months, if not more, to get the money back. The process is not completed until the returns are filed and the deadline for filing is 20th of every month for transactions in the previous month.
With interest rates rising and payment cycles from overseas buyers getting longer, exporters said that there was a need for additional liquidity.
The issue is supposed to be discussed with the Union Minister for Textile, Commerce and Industry Piyush Goyal in a meeting with a number of export promotion councils on 7 October.
Exporters, already facing global headwinds and high inflationary pressure, say that the GST exemption is more crucial in the current scenario as container rates are already very high.
The recessionary trends have led to tough competition from other countries in international market. International buyers have already started delaying accepting orders. Thus, the inventory cost in holding export consignments in India is also increasing.
