Skip to main content

Export Norms Changed To Clear Procedural Mess After Gst


In a move to sort out the procedural mess that exports have got stuck into after the roll-out of the goods and services tax (GST), the Customs department has notified that currency exchange rates for drawback purposes would be announced on a fortnightly basis, as was the case earlier.
“Customs duty is payable only in the rupee, and GST norms had stipulated that foreign exchange conversions should be according to the Reserve Bank of India’s reference rate, which is updated on a daily basis. Traders had complained that it made processing large volumes of payments difficult,” said Abhishek Jain, tax partner, EY. Now, traders can go back to paying the free-on-board (FOB) value of exports based on the rupee value according to the exchange rate notified by the Customs department for drawback purposes, Jain said. For services exports, any generally accepted accounting basis is allowed.
The circular also allowed self-certification for higher duty drawback. “Being asked to furnish a certificate from tax authorities stating that exporters will not claim benefits under the new GST regime if he claims higher duty drawback was causing problems,” said Ganesh Gupta, president, Federation of Indian Exports Organisations (FIEO).
Tax authorities were not issuing such a certificate and, in its absence, grant of lower drawback was affecting the liquidity of businesses, especially those operating in the small and medium enterprises segment, and complicating administrative work at the exporter’s end, he said.
Even services exporters are facing roadblocks — previously not having had to submit any letters but now required to do so. “Exporters are reluctant to export as getting certificate from GST authorities only adds to the transaction time and cost,” FIEO said in a representation to the finance ministry. The new move is expected to save the transaction time and cost, but exporters have been advised to to do their own calculation while claiming higher drawback as they have to forego IGST refund/ITC refund/carry forward of CENVAT credit.
The circular also clarified that while supplying to SEZs for export purposes or otherwise, traders need to mention whether it was being done under an LUT (letter of undertaking) or a bond. 
After the GST implementation, exporters had raised the issue of lack of clarity on norms relating to submission of bonds or LUTs for clearance of export consignments and sought IGST exemption. 
However, earlier this month, the government had said big exporters with a good track record can give an LUT to the customs department while small exporters would have to give a bond to seek IGST exemption. But problems in this regard have persisted.
The Customs department has notified that currency exchange rates for drawback purposes would be announced on a fortnightly basis The traders can now go back to paying the free-on-board value of exports based on the rupee value according to the exchange rate The new tax regime is expected to save the transaction time and cost Big exporters with a good track record can give an LUT to the Customs department, while small exporters would have to give a bond to seek IGST exemption.
The Business Standard, New Delhi, 31st July 2017

Comments

Popular posts from this blog

Credit card spending growth declines on RBI gaze, stress build-up

  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the...

SFBs should be vigilant, proactive to mitigate risks: RBI deputy guv

  The Reserve Bank of India’s Deputy Governor Swaminathan J on Friday instructed the directors of small finance banks (SFBs) to be vigilant and proactive in identifying emerging risks in the sector.Speaking at a conference for directors on the boards of SFBs, Swaminathan highlighted the role of governance in guiding SFBs towards sustainable growth with stability. He also emphasised the importance of sustainable business models.Additionally, he highlighted the need for strengthening cybersecurity to protect the entities against digital threats and urged for a stronger focus on financial inclusion, customer service, and grievance redressal to ensure a broader reach of banking services.Executive Directors S C Murmu, Rohit Jain, and R L K Rao, along with other senior officials representing the Supervision, Regulation, and Enforcement Departments of the RBI, also participated in the conference.   -  Business Standard  30 th  September, 2024

Brigade Hotel Ventures files draft papers with Sebi for Rs 900 crore IPO

  Brigade Hotel Ventures Ltd, owner and developer of hotels in South India, has filed draft papers with capital markets regulator Sebi to raise Rs 900 crore through an initial public offering (IPO).The proposed IPO is entirely a fresh issue of equity shares with no Offer-for-Sale (OFS) component, according to the draft red herring prospectus (DRHP).Proceeds from the issue to the tune of Rs 481 crore will go towards payment of debt, Rs 412 crore will be allocated to the company and Rs 69 crore to its material subsidiary, SRP Prosperita Hotel Ventures Ltd.Additionally, Rs 107.52 crore will be used to purchase an undivided share of land from the Promoter, BEL, and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.The company may raise up to Rs 180 crore through a Pre-IPO Placement.   If the placement is undertaken, the issue size will be reduced.Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises ...