World Trade Center Mumbai welcomes the key measures taken to reduce the undue burden of the Goods and Services Tax (GST) on exporters at the 22nd Meeting of the GST Council on October 6, 2017.
Specifically, we welcome move to expedite refund of Integrated Goods and Services Tax (IGST) paid by exporters for the month of July and August. Speedy settlement of refund will prevent the blockage of working capital for long period of time, thereby easing liquidity position of exporters.
In a major improvement in the ease of doing business, exporters will have to approach only one authority for seeking refunds. Henceforth, the GST Council has empowered the Central and State GST officers to decide on refunds of IGST.
However, we would like to note that speedy refund of IGST is only a temporary solution to the working capital problem of exporters. The permanent solution lies in the introduction of "e-Wallet" system for advance refund of IGST. We hope the GST Council will introduce the e-Wallet by April 2018, as committed by it.
Meanwhile, merchant exporters, who are mostly micro, small and medium enterprises (MSMEs), will benefit from the GST Council’s decision to reduce GST to 0.1% on procurement of goods from domestic suppliers for export.
Exporters were worried about the imposition of 5% GST on trading of scrips issued under the Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme (SEIS). We welcome the move of the GST Council to eliminate GST on trading of these scrips, especially at a time when the relevance of these scrips has declined under the GST regime.
We also welcome the reduction in the GST on a slew of food and non-food products announced during the 22nd Meeting of the GST Council.
In order to reduce the compliance burden of small and medium enterprises, the GST Council has allowed businesses with an annual turnover of up to Rs. 1.5 crore to file returns on a quarterly basis, instead of monthly basis.
In order to allow more and more enterprises to make use of the Composition Scheme, the GST Council has enhanced the annual aggregate turnover ceiling to Rs 1 crore from the existing threshold of Rs. 75 lakhs. Thus, enterprises with an annual aggregate turnover of upto Rs 1 crore can benefit from the least compliance procedure under the Composition Scheme.
We hope the above measures will improve the competitiveness of exporters and other MSMEs in the global market and also enhance the compliance of assessees under the new tax regime.