Some problems of exporters remain unaddressed. The Council did decide to extend the present dispensation of Integrated GST (IGST) exemption for import by export-oriented units (EOUs) and under advance authorisation and Export Promotion Capital Goods (EPCG) authorisation till October 1 but did not address the devil in the details. The notifications relating to import under advance authorisation prescribe unnecessary and unrealistic stipulations, such as pre-import condition, if IGST exemption is to be taken. The notification relating to import under EPCG authorisation does not allow discharge of export obligation through deemed export if IGST exemption is availed of. Also, any buyer of goods from those availing of IGST exemption for import under advance authorisation or EPCG authorisation or notification applicable for EOUs may export only under Letter of Undertaking, without payment of IGST. Import under duty credit scrips will continue to attract IGST.
A review of all these restrictions is overdue. Domestic procurement made under advance authorisation, EPCG authorisation and by EOUs are recognised as ‘deemed export’. With flexibility for either suppliers or buyers to claim refund of GST paid thereon. Exporters have been requesting for grant of upfront exemption or payment of 0.1 per cent GST on such transactions, rather than the mechanism of ‘pay full GST first and then take refund’. Also, if suppliers avail of this refund facility, the buyers cannot export on payment of IGST under rebate claim. Such restrictions curb the flexibility of exporters and, therefore, deserve a review.
The issue receiving attention is the refund of IGST paid on export goods. Considering the large number of mismatches between the data furnished in shipping bills and GSTR-1 returns, the finance ministry has put in place an alternative mechanism for settling of refund claims, involving the intervention of Customs officers. The Central Board of Excise and Customs (CBEC) has issued a useful circular, clarifying various issues. Its head has asked Customs field formations to conduct camps for clearing all refund claims by end of this month. However, past experience shows such camps are not a great substitute for rationalisation of the provisions. A better course would have been to first disburse the refund claims on the basis of shipping bill data and then take up the issue of mismatch. The finance ministry says the GST Council reviewed the progress in grant of refunds to exports of both IGST and Input Tax Credit and appreciated that the pace of grant of IGST refund had picked up. The Council relies on inputs from this ministry. However, till the unnecessary restrictions on EOUs and other exporters importing their inputs or capital goods availing of IGST exemption or procuring goods from domestic sources under deemed export provisions are removed, the reliefs given to exporters with so many strings attached will mean ‘ease of doing business’ for them only in a very limited way.
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