There has been a setback in the preparation of tax refunds under the Goods and Services tax regime resulting in lockup of funds of the exporter. This had major impacts on the ability of the exporters to be internationally competitive.
There was a meeting held on September 19 to discuss the issues that are related to export sector after GST implementation, with the head of the committee Revenue Secretary, Hasmukh Adhia.
In the course of the meeting, the Federation of Indian Export Organisation stressed that the exporters refund process should be fast tracked by the government or as much as 65,000 crore could be blocked in the July-October period, that will affect the business potential of the exporters.
The Indian exports were not doing well in the month before GST regime was implemented. The export growth rate fell during March-July before it inclined again in August. But the export organisations fear that the growth curve could decline again owing to the negative impacts of GST.
For the inputs by the suppliers, it is a requisite for the exporters to pay GST. As the exports are tax free, they can demand refunds from the government.
A speaker from the Federation of Indian Export Organisation said that the shooting liquidity crunch has affected majority of the exporters as the money paid by them in the form of tax are blocked by the government. The refund of the taxes for the month of July can be expected only in December.
As the deadlines for filing the returns are persistently pushed back, the process of fund claiming is becoming more time consuming than anticipated.