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GST Council decides to extend tax exemptions for exporters by 6 months

12 Mar 2018 Evaluate

The Goods and Services (GST) Council at its 26th meeting, has decided to extend the available tax exemptions on imported goods for a further 6 months beyond March 31. Thus, exporters presently availing various export promotion schemes can now continue to avail such exemptions on their imports up to October 1, 2018, by which time an e-Wallet scheme is expected to be in place to continue the benefits in future.

Besides, the Council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts, has reviewed the progress in grant of refunds to exports of both IGST and Input Tax Credit. It has appreciated that the pace of grant of IGST refund has picked up. Thereafter, it has directed GSTN to expeditiously forward the balance refund claims to the central GST or state GST authorities, for their immediate sanction and disbursal.

In its meeting on October 6, 2017 the Council had taken up the issues faced by exporters due to cash blockage on account of having to upfront pay GST or IGST on the inputs, raw materials etc. and finished goods imported or procured for purposes of exports. As an interim solution, the Council had decided to re-introduce the pre-GST tax exemptions on such imports till March 31. Additionally, for merchant exporters, a special scheme of payment of GST at 0.1 per cent on their procured goods was introduced.

The permanent solution agreed to by the Council was to introduce an e-Wallet scheme with effect from April 1, 2018. The e-Wallet scheme is basically the creation of electronic e-Wallets, which would be credited with notional or virtual currency by the DGFT. This notional or virtual currency would be used by the exporters to make the payment of GST or IGST on the goods imported or procured by them so their funds are not blocked. 



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