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GST Council extends tax exemptions for exporters by six months


Sending a strong and positive signal to the exporting community, the GST Council, during its 26th meeting here, decided to extend the available tax exemptions on imported goods for a further 6 months beyond March 31, 2018. Thus, exporters presently availing various export promotion schemes can now continue to avail such exemptions on their imports up to October 1, 2018, by which time an e-Wallet scheme is expected to be in place to continue the benefits in future, highlighted a release.


In a related development which would benefit the exporters, the Council reviewed the progress in grant of refunds to exports of both IGST and Input Tax Credit. The Council appreciated that the pace of grant of IGST refund has picked up. Thereafter, it directed GSTN to expeditiously forward the balance refund claims to the Customs/Central GST/state GST authorities, as the case may be, for their immediate sanction and disbursal.


It may be recalled that at its meeting held in October 2017, the Council had noted that exporters are experiencing difficulties of cash blockage on account of having to upfront pay GST/IGST on the inputs, raw materials etc., finished goods imported/procured for purposes of export. An interim solution was found by re-introducing the pre-GST tax exemptions on such imports. Additionally, for merchant exporters, a special scheme of payment of GST @ 0.1 per cent on their procured goods was introduced. Also, domestic procurement made under Advance Authorisation, EPCG and EOU schemes were recognised as ‘deemed exports’ with flexibility for either the suppliers or the exporters being able to claim a refund of GST/IGST paid thereon. All these avenues were made available up to March 31, 2018.


The permanent solution agreed to by the Council was to introduce an e-Wallet scheme with effect from April 1, 2018. The scheme is basically the creation of electronic e-Wallets, which would be credited with notional or virtual currency by the DGFT. This notional/virtual currency would be used by exporters to make the payment of GST/IGST on the goods imported/procured by them so their funds are not blocked.


In December 2017, the Finance Secretary had constituted a Working Group with representatives of the Central and state governments to operationalise the e-Wallet scheme. After reviewing the progress, the Council noted that whereas some preparatory work had been done, more needs to be done to address a large number of technical, legal and administrative issues that have been identified. The Council appreciated that this would require more time. The Council was also unanimous that there should be no disruption which may affect exports. Accordingly, the Council agreed to:


(a) Defer the implementation of the e-Wallet scheme by 6 months, i.e. up to October 1, 2018


(b) Extend the present dispensation in terms of exemptions, etc., which is available up to March 31, 2018, for a further 6 months, i.e. up to October 1, 2018


Source : Exim News Service - New Delhi, March 12


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