Skip to main content

States not releasing duty drawback refund: Exporters

By
States not releasing duty drawback refund: Exporters
State governments have effectively stopped paying tax refunds under the duty drawback scheme, compounding problems of exporters.
Exporters alleged that since the goods and services tax (GST) was introduced, refunds for the state component of taxes had dried up under the duty drawback scheme because the requisite mechanism was not in place.
“While it is still possible to get states to pay their share of refunds under the integrated GST, refunds to be paid fully by them are not materialising,” said Ajay Sahai, directorgeneral of the Federation of Indian Export Organisations.
The problem was spread across the country, he added.
The duty drawback scheme seeks to rebate duty on any imported or excisable material and service used in the manufacture of goods for export.
Customs, excise and service tax in respect of inputs are neutralised under the scheme.
The Central Board of Excise and Customs, which administers the scheme, had decided to extend it by three months once the GST was introduced on July 1. This was done after exporters had pointed out that the scheme seamlessly reimbursed tax incidence on inputs.
But to avail the duty drawback benefits exporters must not claim input credit under the GST, the government had said.
Exporters´ costs have gone up by up to 1.25 per cent (freight on board) after the GST implementation, according to industry calculations.
Late refunds affect smaller players more and larger firms are facing difficulties in streamlining operations.
A similar issue is at play over duty scrips, the scope of which has been reduced as a tax paying instrument.
Exporters earn duty credits in the form of scrips at fixed rates of 2 per cent, 3 per cent and 5 per cent upon dispatching shipments.
The scrips can be freely transferred or sold.
The government had in August, instituteda12 per cent tax on sale of scrips received for exportincentive schemes such as the Merchandise Export from India Scheme, the Services Exports from India Scheme and the Incremental Export Incentivisation Scheme.
The government´s move had met with opposition from exporters, who claimed it had no justification and affected exports.
The GST Council last week announced the tax was being reduced to 4 per cent.
However, while scrips were earlier allowed to be used for payment of excise, service tax and VAT, they can only be used for payment of basic Customs duty now. “This has added to the cash outgo for exporters,” the EngineeringExportsPromotionCouncil said.
Exporters have demanded that the scrips be allowed to neutralise central and state GST or Integrated GST.
The Business Standard, New Delhi, 14th September 2017

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more