PRESS RELEASE
New Delhi, dated: 10.03.2018
26th Meeting of the GST Council
Subject: Extension of tax exemptions for exporters for six months
Sending a strong positive signal to the exporting community, the Council today decided to extend the available tax exemptions on imported goods for a further 6 months beyond 31.03.2018. Thus, exporters presently availing various export promotion schemes can now continue to avail such exemptions on their imports up to 01.10.2018, by which time an e-Wallet scheme is expected to be in place to continue the benefits in future.
2. 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. The Council 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.
3. It may be recalled that in its
meeting held on 06.10.2017 the Council had noted that exporters are experiencing
difficulties of 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 preGST 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. All these
avenues were made available upto 31.03.2018.
3. The permanent solution agreed to by the Council was to introduce an e-Wallet
scheme w.e.f. 01.04.2018. The e-Wallet scheme is basically the creation of
electronic eWallets, 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.
4. On 16.12.2017, 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 whereas some
preparatory work had been done, more needs to be done to address a large number
of technical, legal and administrative issues that have been identified. The
Council appreciated that this would require more time. The Council was also
unanimous that there should be no disruption that may affect the exports.
Accordingly, the Council agreed to:
(a) Defer the implementation of the e-Wallet scheme by 6 months i.e., up to
01.10.2018; and
(b) Extend the present dispensation in terms of exemptions etc. which is
available up to 31.03.2018, for a further 6 months i.e., up to 01.10.2018.