Multiple promotion schemes to import capital goods for exports exempted from IGST and compensation cess till March 2020.
Exporters operating small and medium-sized units (MSMEs) are set to benefit from the exemption to pay taxes under the GST schemes.
The government has offered to exempt for one more year the payment of integrated goods and services tax and compensation cess by exporters utilising promotion schemes such as the Advance Authorisation scheme, Export Promotion Capital Goods Scheme and Export Oriented Units scheme. GST reliefs under all the three schemes were due to end this month.
Raja M. Shanmugham of the Tirupur Exporters’ Association (TEA) said they had made many representations to the government to get the extension. He said a number of exporters, including knitwear makers, import the machinery to meet the requirements of buyers.
Shanmugham pointed out “the payment of IGST for import of machinery under EPCG scheme could not be claimed as refund as the payment is for capital goods”.
“After implementation of the GST, TEA had requested for exemption from the payment of IGST while importing capital goods under the EPCG scheme or inputs like specialty fabrics under Advance Authorisation scheme. “Considering the need, the government permitted for exemption from payment of IGST for a period of six months on each occasion,” he said.
An Advance Authorisation is issued to allow duty free import of inputs, which are physically incorporated in an export product. EPCG is an export promotion scheme under which an exporter can import certain amount of capital goods at zero duty for upgrading technology related with exports. The Export Oriented Units (EOU) scheme was introduced to boost exports, increase foreign earnings and create employment.
The foreign trade policy (2015-2020) provides a framework to increase the exports of goods and services as well as the generation of employment and increase value addition in line with the “Make in India” programme.
During April-February of the current fiscal year, exports grew 8.85 per cent to $298.47 billion, while imports rose by 9.75 per cent to $464 billion. The trade deficit has widened to $165.52 billion during the 11 months of the current fiscal from $148.55 billion compared to the year-ago period.
Published On : 25-03-2019
Source : Telegraph India
