New Delhi, Sept. 28: Industry bodies and exporters voiced their concerns over the goods and services tax (GST), including timely refund of duties, at a meeting with finance minister Arun Jaitley here today.
"The minister gave a sympathetic hearing to our concerns. He was positive towards the point raised by us," said Federation of Indian Export Organisations (Fieo) president Ganesh Gupta after the meeting.
Merchant exporters, or exporters who trade in goods, account for over 30 per cent of India's $275-billion exports, and usually work on razor thin margins of 2-4 per cent. The imposition of the GST has seen them borrowing money to pay taxes as the GST rate is often several times their profits.
Fieo has warned that exports of tiles, handicraft, textiles and agricultural commodities may witness a steep decline as these sectors are dominated by merchant exporters, who are facing difficulties in meeting tax demands.
"Small exporters are particularly hit as they have to borrow money to pay the GST. Availability and the cost of credit is adversely impacting them. The government should consider the introduction of e-wallet for exporters," Gupta said.
A severe liquidity crunch, post-GST, has been impacting exports which could hit India's attempt to boost trade and this has been a cause of worry for both the commerce and finance ministries.
"The imposition of IGST is affecting the liquidity of exporters and blunting their competitive edge. They and many other countries, operating under GST/VAT regime, on the other hand, provide the complete exemption from import charges on inputs used in exports," officials admitted.