Thank you for your response
Our representative will get in touch with you shortly.
Thank you for your response
Central Board of Indirect taxes and customs (CBIC) has notified that the period of exemption granted to Export-Oriented Units (EOU) and Software Technology Parks (STP) from payment of Integrated Goods and Services Tax (IGST), and compensation cess on the supplies is further extended till 31st March 2019. Further, the exporters availing the EPCG scheme or are exporting under the Advance Authorisation (AA) scheme, have also been granted this exemption.
Finance minister Arun Jaitley said that the government is working on ways to boost the export sector in India. Recently, the depreciation of the rupee against the dollar and the rise in current account deficit has led the government to re-examine the issues the EXIM sector faces. While the system for timely processing of IGST refunds is still getting stabilised, the exporters needed an interim relief. Paying IGST upfront and claiming its refund later may have stressed the inflow of the working capital for exporters. Therefore, this extension serves as a boon to several MSMEs engaged in the export sector.
Under Customs laws, the EOUs and STPs do not pay a basic customs duty or special additional duty. As far as domestic taxes are concerned, the GST laws apply to zero-rated supplies; this was not the case in the previously mandated excise or VAT laws. The refund process under GST faced teething issues that led to delays in IGST refunds and blockage of cash for the EXIM sectors. The implementation of IGST exemption was initially put on hold first few months of GST being introduced. However, the need to notify the exemption rose on Oct 13, 2017, due to the ever-increasing concerns over delays in the refund of IGST to the exporters. The CBIC decided to extend the exemption for a further, until the institution of the e-wallet scheme; that is supposed to positively resolve the issue of delayed refunds.
The e-wallet scheme was primarily about electronic wallets for every importer or exporter. A notional credit i.e virtual money will be credited by the Directorate General of Foreign Taxes (DGFT) to the accounts of EXIM businesses. The amount credited will be utilized to pay the taxes on inputs and raw materials, so that the funds are not blocked. The exemption was further pushed till Oct 1, 2018, with the assumption that e-wallet scheme will be in place. However, it seems that extra time is required before the introduction of e-wallets. Therefore, the IGST exemptions have been extended till March 2019. It is hoped that a sustainable resolution – such as an e-wallet scheme – is introduced in time to do away with the need for an interim solution, such as IGST exemption.