To boost exports expedite gst refunds

To boost exports expedite gst refunds

Although the marginal dip in September exports, over the year-ago figure, is statistical, there is every reason to remove one major hurdle to export growth: unpaid GST credit cumulating to ₹22,000 crore, according to the Federation of Indian Export Organisations (FIEO). Delays block working capital for exporters and further hurt exports. India’s current account deficit (CAD) is under pressure on the back of rising crude prices. The government is trying to rein in CAD by levying more import curbs instead of promoting exports. Its decision to levy higher tariffs to curb imports goes against the grain of globalisation and legitimises US President Trump’s move to scupper the rules-based world trading system. The policy stance is not helping exports grow either.

FIEO claims that as much as ₹22,000 crore refunds — about ₹7,000 crore on account of IGST and ₹15,000 crore input tax credit — is pending before the government. The cost of credit for exporters has risen by about 5-6%. The reason: many exporters have turned to costly informal credit since banks have virtually stopped lending to them. The smaller ones are facing the heat even more. A sliding rupee, FIEO claims, has not helped exporters. Expediting refunds would help exporters at least partly tide over their liquidity crunch. Some procedures have already been eased, true. Exporters can furnish a bond instead of paying IGST and claim the refund of unused input tax credit, or they can export after payment of IGST and then claim the refund. Refunds must be swift in cases where IGST has already been paid.

Associated procedures should also be streamlined. Input tax credit refund, for example, is partly electronic and partly manual. But the documentation requirements vary from authority to authority. Such absurdity must go.