ET Online|
Updated: Mar 10, 2018, 04.00 PM IST
The 26th GST Council meeting on Saturday decided to defer the implementation of the e-Wallet scheme by six months and exporters presently availing various export promotion schemes can now continue to avail such exemptions on their imports up to October.
According to a press note and in a related development which would benefit the exporters, the Council reviewed the progress in grant of refunds to exports of both IGST and Input Tax Credit and the appreciated that the pace of grant of IGST refund has picked up. Thereafter, the Council directed GSTN to expeditiously forward the balance refund claims to the Customs/Central GST/State GST authorities, as the case may be, for their immediate sanction and disbursal.
In its meeting on October 6, the Council had taken up the issues faced by exporters due to cash blockage on account of having to upfront pay GST / IGST on the inputs, raw materials etc. / finished goods imported / procured for purposes of exports.
An interim solution was found by re-introducing the pre-GST tax exemptions on such imports. Additionally, for merchant exporters a special scheme of payment of GST @ 0.1% on their procured goods was introduced. Also, domestic procurement made under Advance Authorization, EPCG and EOU schemes were recognized as 'deemed exports' with flexibility for either the suppliers or the exporters being able to claim a refund of GST / IGST paid thereon. The scheme was made available upto March 31.
In December 2017, the Finance Secretary constituted a Working Group with representatives of Central and State Governments to operationalize the e-Wallet scheme. After reviewing the progress, the Council noted that some preparatory work had been done, but more needs to be done to address a large number of technical, legal and administrative issues that have been identified. The Council was also unanimous that there should be no disruption that may affect the exports.
The e-Wallet scheme is basically the creation of electronic e-Wallets, which would be credited with notional or virtual currency by the DGFT. This notional / virtual currency would be used by the exporters to make the payment of GST / IGST on the goods imported / procured by them so their funds are not blocked.
"While the Tax Exemption for Exporters has been extended, the ground reality should be checked by the Government. Interestingly, there has been no announcement for extension of duty-free imports in case of advance authorisation. The real impact on exporters on this front will be known only on April 1. The issue before the Delhi High Court in various writ petitions is to be decided only in July,” says Abhishek A Rastogi, Partner, Khaitan & Co.
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