Exporters facing difficulties in GST transition period: EEPC

Engineering exporters' body EEPC India today said that shipping companies are facing difficulties post GST as their drawback refunds will not be released till September-end or October.

Moreover, the supplies of goods to the export-oriented units from the domestic tariff area are not considered as "deemed exports" under the Goods and Services Tax (GST) regime, resulting in denial of duty free imports of inputs under the 'Advance Authorisation' scheme of the government, the exporters' body said in a statement.

"In fact, several schemes for giving a boost to exporters by the commerce ministry have been turned upside down and their functioning has become extremely difficult or not viable," EEPC India Chairman T S Bhasin said in a statement.

Exports of engineering goods constitute the biggest share in India's overall export basket and are therefore, vital for job creation, particularly in the small and medium enterprises segment.

"Our members have informed us that it would be impossible for them to export in August and September as per this refund time schedule. We request and kindly urge the finance ministry to make the GSTN operative for processing returns and refunds by the beginning of August," EEPC India said in its communication to the finance and commerce ministries.

According to the exporters' body, as supply of goods to the export oriented units (EoU) from domestic tariff area are not considered as "deemed exports" in the GST regime, shippers are not allowed to import the inputs without payment of duty under Advance Authorisation.

Moreover, exporters will have to pay the basic customs duty, cesses and IGST for imported inputs to be used for supplies to EoU. They are entitled to input tax credit of only IGST. Basic customs duty and cesses are thereon a cost to them.