The trade body Engineering Export Promotion Council (EEPC) of India has said that exporters are experiencing severe difficulties post Goods and Services Tax (GST) regime as their drawback refunds will not be released till September-end or October. According to the exporters’ body, as supplies of goods to the export-oriented units (EOUs) from the domestic tariff area (DTA) are not considered as deemed exports under the new tax regime, shippers are not allowed to import the inputs without payment of duty under ‘Advance Authorisation’ scheme of the government.
Moreover, it noted that exporters will have to pay the basic customs duty, cesses and IGST for imported inputs to be used for supplies to EoU. It also said that they are entitled to input tax credit of only IGST. It also noted that basic customs duty and cesses are thereon a cost to exporters.
EEPC India Chairman T S Bhasin further said that several schemes introduced by the commerce ministry for giving a boost to exporters have been turned upside down and their functioning has become extremely difficult or not viable. He also stated that exports of engineering goods constitute the biggest share in India's overall export basket and are therefore, vital for job creation, mainly in the Small and Medium Enterprises (SME) segment.