GST Council Meet: Exports are Tax free for 6 months
The Goods and Services Tax (GST) Council, headed by the Finance Minister Arun Jaitely has discussed the issues of Small and Medium Enterprises (SMEs) and Exporters under the new indirect tax regime.
While addressing the medias after the 22nd meeting of the Council, Mr. Arun Jaitely announced that tax refund for the months July and August will be given to the exporters from 10th and 18th of this month. The payment would be in the form of cheques, Jaitely said.
Further, the exporters are exempted from the Integrated Goods and Services Tax (IGST) for 6 months.
The permanent solution to cash blockage is that of “e-Wallet” which would be credited with a notional amount as if it is an advance refund. This credit would be used to pay IGST, GST etc. The details of this facility would be worked out soon. The Council has also decided to provide e-wallet facility for exporters from April 2018 onwards. Till then, the exporters required to give a nominal amount of 0.1 percent for procuring goods from domestic suppliers for export. The details would be released soon, a statement released by the Finance Ministry said.
“The Government is working to create an online platform for exporters”, Finance Minister said.
As decided by the Council, specified banks and Public Sector Units (PSUs) are being allowed to import Gold without payment of IGST.
To prevent cash blockage of exporters due to upfront payment of GST on inputs etc. the Council approved two proposals, 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% EOU schemes to sourcing inputs etc. from abroad as well as domestic suppliers. Holders of AA / EPCG and EOUs would not have to pay IGST, Cess etc. on imports. Also, domestic supplies to holders of AA / EPCG and EOUs would be treated as deemed exports under Section 147 of CGST/SGST Act and refund of tax paid on such supplies given to the supplier.
Also, Exporters have been exempted from furnishing Bond and Bank Guarantee when they clear goods for export.
To restore the lost incentive on sale of duty credit scrips, the GST on sale-purchase of these scrips is being reduced from 5% to 0%.