Exporters worried over losing tax flexibility after IGST tweak – The Economic Times

Clipped from: https://economictimes.indiatimes.com/news/economy/policy/exporters-worried-over-losing-tax-flexibility-after-igst-tweak/articleshow/80693703.cms?utm_source=ETTopNews&utm_medium=HPTN&utm_campaign=AL1&utm_content=23Synopsis

Earlier, exports could be made either on payment of the integrated tax or under bond. Citing liquidity crunch and higher transaction time and costs, exporters have sought restoration of the option of payment of IGST as more than half of the exporters use this route.

NEW DELHI: Exporters are concerned about the proposed amendments in the integrated goods and services tax (IGST) in the Finance Bill that have taken away the flexibility of exporting on the payment of the integrated tax.

Earlier, exports could be made either on payment of the integrated tax or under bond. Citing liquidity crunch and higher transaction time and costs, exporters have sought restoration of the option of payment of IGST as more than half of the exporters use this route.

“A fairly large number of exporters are availing the IGST payment facility and they prefer to pay IGST since the refund was quick, it was a better option,” the Federation of Indian Export Organisations (FIEO) said in a letter to finance ministry on Wednesday.

“The process of input tax credit (ITC) involves choosing a period for filing the claim, uploading the documents and thereafter, with considerable delay, getting the payment,” the FIEO letter said.

As per the Bill, a registered person making zero rated supply shall be eligible to claim refund of unutilised input tax credit on supply of goods or services or both, without payment of integrated tax, under bond or Letter of Undertaking (LUT).

However, the government, on the recommendation of the GST Council and subject to conditions, safeguards and procedures, may notify a class of persons, goods or services who may make zero rated supply on payment of integrated tax and claim refund.

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