The GST council has specified 0.1 percent tax rate on goods acquired for export purposes in a relief to merchant exporters.
A senior ministry official said that the exporters would be permitted to procure 0.1 percent tax on export of goods.
The Council consented two proposals, to put a stop to cash blockage of exporters caused by upfront payment of GST on inputs, stated an official statement.
"One for immediate relief and the other for providing long-term support to exporters. Immediate relief is being given by extending the advance authorization (AA)/ Export Promotion Capital Goods (EPCG)/100 per cent EOU schemes to sourcing inputs from abroad as well as domestic suppliers," the statement said.
It was mentioned that there is no need to pay IGST and cess on imports for the holders of AA/ EPCG and EOUs.
"Also, domestic supplies to holders of AA / EPCG and EOUs would be treated as deemed exports and refund of tax paid on such supplies given to the supplier," it added.
Furthermore, Public Sector Units and specified banks are also permitted to import gold without payment of IGST.
"This can then be supplied to exporters as per a scheme similar to AA," it added.
The merchant exporters of India record for over 30 percent of the country’s exports that usually work on the margins of 2-4 percentage.
Especially for those products having high GST imposition rates, the costing was disorganised as they got to pay GST and seek refund after a time lag, said FIEO in a statement.
For the exporters, attempts would be made to initiate an e-wallet facility to provide liquidity from April 1. The Directorate General of Foreign Trade (DGFT) will draw up norms, for the operation of e-wallet facility.
FIEO had said earlier that, as most of the micro and small exporters borrow money to pay taxes, they are hit hard by GST.
It is notified that based on the previous year’s exports and an average GST rate, under this facility e-currency is credited to exporter’s account. ,
When the duty paid supplies have to be undertaken, the money can be debited from e-wallet. When the proof of exports is made available, the amount can be credited to a running account, it said.
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