Recommendation made by committee of CBIC, DGFT officials to be examined
The GST Council may take up a plea by exporters to be allowed to switch over from duty drawback scheme to I-GST refund for the three-month transition period to the new Goods & Services Tax (GST) regime last fiscal, when they were allowed to choose between the two.
Exporters say many were not aware that refund of input duties under I-GST would be much higher. “Following the request made by exporters to be allowed to repay the duty drawback already collected for the three-month period and claim I-GST refund instead, the Commerce Minister had set up a committee comprising officials from the Central Board of Indirect Taxes and Customs and the Directorate-General of Foreign Trade to sort out the matter. The GST Council, in its meeting on Sunday, may examine the suggestions made by the committee and take a decision,” a government official told BusinessLine.
After the new GST regime was put in place in July 2017, exporters were given the option of continuing with the popular duty drawback scheme (at a higher rate for some items) for three months (July-September) for refund of the input duties paid by them if they agreed to forego refund of IGST.
A large number of exporters availed of the option and claimed their duty drawback refund only to realise later that if they had opted for refund under IGST, the amount they would have received would have been much higher.
“Many exporters at that time did not understand the details of the GST regime. Their decision to opt for duty drawback was a mistake which they realised. Exporters are willing to give back the drawback received with the interest due if they are allowed to claim IGST,” explained Ajay Sahai, Director General, FIEO.
The GST Council, on Sunday, is also expected to examine and decide on a new scheme for compensation of taxes paid by exporters as under the GST regime exporters are compensated only for the basic customs duty paid on inputs.
via GST Council may take up exporters’ plea to switch to better duty refund option – The Hindu BusinessLine