The Centre is still figuring out a way to refund the taxes including those which are still being paid by the exporters, since the introduction of Goods and Services Tax (GST) programme. A Government official was quoted by a leading media house saying that these refunds will not just enhance the exporters to compete in the global market but it will also answer the questions being raised on India’s export subsidies at the World Trade Organisation (WTO) programme.
The exporters are contentiously paying electricity duty, Value Added Taxes on petroleum goods, mandi tax, stamp duty and other taxes without getting any refund under the GST regime. “If the Government can find a way to refund these taxes quickly it will help the textile industry signifacntly,” said the Government official.
Markedly, the Commerce Ministry has set up an informal committee which is lead by Directorate-General of Foreign Trade, along with representatives from the industry to find alternative ways to compensate the exporters.
Interestingly, the Government recently announced to address the GST refund issue in coming time but as the deadline to meet this issue is getting close, this statement has once again put the Indian exporters in a dicey situation.
As previously reported, Apparel Export Promotion Council (AEPC) put forth the issue in front of the Union Textile Minister, Smriti Zubin Irani about the additional burden of 4-5 per cent that the exporters face due to the embedded taxes that includes a charge on cotton, electricity, and input tax credit limitations for man-made fabric which is bought from an unregistered dealer.
The knitwear hub of India is still healing from the cash-crunch situation that the Finance Ministry is trying to heal by hosting clearance camps fortnightly but there is still a considerable amount pending.