Skip to main content

NPCI, NSDL in fray to develop e-wallet for exporters

NPCI, NSDL in fray to develop e-wallet for exporters
The National Payments Corporation of India (NPCI) and the National Securities Depository Ltd (NSDL) are in the fray for operating the proposed ewallet system for exporters under the goods and services tax (GST) regime.The government is yet to decide on the agency that will develop the notional credit system to help exporters with working capital flow.GST Network (GSTN), the information technology backbone of GST, is also being considered for this.

In the government´s push foracashless economy, NPCI developed the Bharat Interface for Money (BHIM) app for making payments, available for customers of 55 banks across the country.NSDL, the country´s first and largest depository, handles most of securities held and settled in dematerialised form.

It is also a GST Suvidha Provider, which facilitates filing of returns.The directorate general of foreign trade (DGFT) is working out the amount of credit an exporter will initially need.E-wallet is essentially a notional credit and will not hit the exchequer, as it is not backed by actual money.“The government will not have to put in anything.

It will be all notional, based on the exporter´s record with DGFT,” said Revenue Secretary Hasmukh Adhia.Based on an exporter´s past record, DGFT will decide the amount of inputs he or she is buying, based on which how much tax one will have to pay on inputs will be calculated.“You can transfer it to anyone with an e-wallet.

Even a trader can have an e-wallet and receive credit from an exporter and use it to pay GST. Notional credit can be used to pay CGST and IGST,” said Adhia.The account will be replenished when one gets the refund and will stay with him. “With this, there will be no working capital blockage and no interest liability for exporters,” Adhia added.

Exporters have complained of working capital constraints.due to the slow rate of refunds on IGST by the government.In a relief for exporters till the e-wallet becomes functional, the GST Council, chaired by Finance Minister Arun Jaitley, decided to lower the IGST for merchant export to a nominal 0.1 per cent till March 31.

In the pre GST regime, no tax was charged at the time of export.Now, IGST needs to be paid, which exporters may claim as refund while filing returns.Amid constant complaints of working capital blockage, the GST Council decided to expedite refunds for exporters.Since October 10, the government has refunded around Rs 200 crore of IGST paid on export in July, of a total claim of Rs 750 crore.

About Rs 67,000 crore has been collected as IGST, from which refunds to exporters are estimated at about Rs 2,000 crore for July and August.
The Business Standard, New Delhi, 30th October 2017

Comments

Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

New money laundering norms stump jewellery sector

New money laundering norms stump jewellery sector Dealers with turnover of Rs 2 crore and above covered; industry says threshold too low The central government has notified the money laundering rules for the gems and jewellery sector with immediate effect. Now, any entity deals in precious metals, precious stones, or other high-value goods and has a turnover of Rs 2 crore or more in a financial year will be covered under the Prevention of Money Laundering Act, 2002 (PMLA, 2002). The limit of Rs 2 crore would be calculated on the basis of the previous year’s turnover, said the notification. The directorate general of goods and service tax intelligence has been appointed under the Act. Sources said the government’s move to apply the PMLA to the jewellery sector was a fallout of income-tax raids on jewellers soon after demonetisation last November, when it was found that they sold gold and jewellery at a huge premium and accepted old currency notes as payment. The notification, issued on Augus…

Confusion over branded food GST

Confusion over branded food GST The GST Council's statement over the weekend on applying tax on branded food items has left most of the trade confused.

Even though the Council has not changed the rates on food -0 per cent on unbranded stuff and 5 per cent on brands -many small traders who didn't levy GST earlier said they could come under the 5 per cent slab after the clarification.

While they predicted some increase in consumer prices, large players said they can absorb GST in many ways and keep prices steady.

"Trade is confused and hence on behalf of our chamber, we have asked our members to go ahead and charge 5 per cent GST," said Sushil Sureka, general secretary of the Ahilya Chamber of Commerce and Industry in Indore.

The statement clarifying the application of GST came after some businesses were found deregistering their brands and selling under corporate brand name without paying tax, after the Council exempted unbranded food from the new all-encompassing indirec…