DRI had began issuing notices to exporters for wrongfully availing GST exemptions in instances the place exports preceded imports.
“The objective of providing the working capital benefits to the Indian exporters gets defeated by the rule which goes beyond the statute. Applicability of interest would result in a great setback to the Indian exporters and the need for judicial intervention is must”, responded Abhishek A Rastogi, companion at Khaitan & Co.
The exporters have been requested to pay IGST first because the international commerce coverage has been amended and a number of other notifications have been issued in the previous couple of months. The IGST charge in these instances is 18% on the common, whereas for some merchandise it’s 12% and 5% for only a few. Industry trackers say that underneath the sooner tax regime and international commerce coverage (FTP), there was no obligation if imported uncooked supplies have been used for exports, even when exports preceded imports.
The present GST framework has laid down sure situations for exporters to avail sure advantages. A income division notification stated uncooked supplies can’t be imported after export of the ultimate product. The authorities launched an modification within the GST framework that led to DRI chasing down the exporters.
The modification spoke primarily of a “pre-import condition” that each exporter must observe to avail obligation exemptions on imports. “In cases where exports preceded imports, availment of exemption does not seem legal and proper. This office has initiated an inquiry in wrongful availment of exemption,” a discover learn.
Source : Economic Times