GST To Make Indian Exports More Competitive, Says Commerce Minister Nirmala Sitharaman

The Goods and Services Tax (GST), once implemented, will make Indian exports more competitive and improve export growth, Commerce Minister Nirmala Sitharaman said on Saturday. She was speaking at a media briefing on three years of initiatives and achievements of the commerce ministry.

“The way the GST discussions have happened and the way in which commodities and exports have been treated, it is going to improve exports,” Sitharaman said.

The GST Council on Friday announced the fitment of services and 1,211 goods in the GST tax rates, heading towards the July 1 rollout of the new indirect tax regime.

Sitharaman also said that the GST Council has been fairly seized of the tax refund issue under GST. Responding to exporters who raised concerns on refund of duties, she said that 90 percent of advanced paid money will be refunded within six to ten days, after which an interest of about 6 percent will be given for any delay.

“As far as exports are concerned, these are zero-rated. Whatever tax is paid, different inputs will be refunded to the exporter. There will be ease of refunds in the whole system. As the whole value chain is linked, it is much easier for them to take the refund in the new system," Ajay Kumar Bhalla, Director General of Foreign Trade said at the briefing.

India's total exports rebounded with a growth of 4.95 percent in the financial year 2016-17 despite a negative growth in services.

Sitharaman added that the ministry has asked the GST Council to consider to formulate an alternative mechanism for small and medium exporters on the issue pf payment of taxes.

"Our request with the council was that for SMEs. If we can think of giving an alternate to them rather than asking them to pay first and then get refund. We are yet to hear from them (Council)," she said.