The GST rollout will provide much-needed competitiveness to India's shipments by reducing transaction cost, Federation of Indian Exports Organisations said today.
The exporters' body, however, said there will be initial hiccups as exporters will have to withstand the blockage of their working capital.
FIEO President Ganesh Kumar Gupta said looking at the pragmatic approach of the government in facilitating Exim trade, the traders' body is optimistic that the Centre will soon consider giving IGST exemption to various duty neutralisation instruments under Foreign Trade Policy, besides exemption on procurement of goods by merchant exporters.
The Goods and Services Tax (GST), which comes into effect from midnight, will overhaul India's convoluted indirect taxation system and unify the over USD 2 trillion economy with 1.3 billion people into a single market.
"The implementation of GST, heralding a new era in tax reforms, would impart much needed competitiveness to Indian exports with initial hiccups. The spin-off effect on economy particularly on the logistics sector would also help both manufacturing & exports," Gupta said.
He said that in the initial stages, exporters will have to bear the blockage of their working capital and therefore the refund mechanism should be efficient.
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