Commerce Ministry to vie for initial exemption for exporters in GST

The Commerce Ministry will press for ab-initio exemption for exporters from the upcoming Goods and Services Tax at the two-day meeting of the GST Council beginning on Tuesday.

Commerce and Industry Minister Nirmala Sitharaman will participate in the meeting of the council headed by Finance Minister Arun Jaitley.

Exporters’ body FIEO has demanded that under the GST regime, exemption on final export products should continue in order to promote overseas shipments.

“Exemption on the final export products should continue, else it will lead to problem of working capital particularly for MSME units,” Federation of Indian Export Organisations (FIEO) President S C Ralhan said.

Currently, exporters get exemption from levies but once the GST comes into force, it is feared that they will have to seek refund of taxes.

The Commerce Ministry had earlier suggested to Finance Ministry that the exemptions given to exporters should continue under the new indirect tax regime, GST.

The proposed procedure of paying taxes and then claiming the refunds by exporters under the GST would cause hardships for them, said an official.

The ministry also wants the distinction between domestic tariff area and special economic zones to be maintained under the new regime.

The GST Council will meet on Tuesday and representatives of six crucial sectors, including IT, telecom, banking and insurance, to assess the implementation hurdles under the new GST regime.

This will be the eighth meeting of the Council since it met for the first time on September 22, 2016.

Once implemented, GST will subsume various taxes including excise, services tax, octroi and other levies and the proceeds will be shared between the Centre and states.