The commerce ministry today notified exemption from IGST (Integrated Goods and Service Tax) and compensation cess for procurement under advance authorisation and EPCG scheme till October 1, 2018.
Export Promotion Capital Goods (EPCG) is an export promotion scheme under which an exporter can import certain amount of capital goods at zero duty for upgrading technology related with exports.
On the other hand, advance authorisation is issued to allow duty free import of input, which is physically incorporated in export product.
The GST Council, headed by Finance Minister Arun Jaitley and comprising state counterparts, extended the exemption available for domestic procurement made under Advance Authorisation, EPCG and export oriented unit schemes by six months till October 1.
The move was aimed at giving relief to exporters, who are reeling under stress with regard to claiming refund under GST.
In a notification, the Directorate General of Foreign Trade (DGFT) said that exemption from integrated tax and compensation cess under advance authorisation scheme and EPCG scheme of foreign trade policy 2015-20 is extended up to October 1, 2018.
In the GST regime, merchant exporters are required to either pay IGST and claim refund for the same. Manufacturing exporters can claim refund of taxes paid on input.
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