The Federation of Indian Export Organisations (FIEO) has raised concern over implication of the Goods and Services Tax (GST), and said that it will severely dent the liquidity situation of traders and the compliance cost of merchant exporters may go up.
The top exporter body further added that export competitiveness of India may tank by about 2 per cent and this will be a big blow to exporters. It pointed that before GST, exporters used to get ab-initio exemptions from duties. But they have to pay first and then seek refund and due to this process, about Rs 1,85,000 crore will get stuck with the government.
FIEO President Ganesh Kumar Gupta termed GST as a “path breaking” reform, but it will bear fruits in the long run with initial hiccups. He said that that the liquidity problem of the exporters, delays in initial returns for exports in July and August, procedural issues in bonds are being flagged by FIEO with the officials concerned.
FIEO had already asked the government to provide interest on delay in payment of refund of taxes/duties after 10 days of exporters filing claim under the GST regime. As per the refund rules, the interest on delayed payment would be due only after 60 days.