Changes likely in export related schemes due to GST: DGFT

The DGFT, A K Bhalla said there could be a mid-term review of the FTP.

The Dollar Business Bureau 

The Ministry of Commerce may have to make some changes in the export-related schemes due to the implementation of the GST. The DGFT, A K Bhalla said that the commerce ministry is in consultation with the stakeholders’ for a mid-term review of the Foreign Trade Policy (FTP).

Speaking to the media at a meeting of the FIEO in New Delhi, Bhalla said, “There is going to be certain changes (in the FTP) due to the implementation of GST. Some schemes may be rewritten.” 

It should be recalled here that the Commerce and Industry Ministry had in January, appealed to the GST Council to keep exports out of the GST ambit or provide ‘ab intio exemption’ to exporters and levy lower taxes on labour-based industries like cement, plantation and leather. The Commerce Minister had also appealed to the Council to consider the fact that it takes nearly 6-8 months for exporters to get a refund of their taxes and that GST should not become another new liability and in the process make them suffer twice. 

The GST is likely to subsume service, excise and other local taxes. The dual nature of India’s GST is expected to make implementation a complex problem and rob off some of the key features of ease of doing business. However, with uniform taxation and cost efficiencies owing to reduced time and costs in transportation, one obvious effect would be that ‘Made in India’ products would now be more cost competitive in the global markets.  The subsuming of major Central and State taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of Central Sales Tax (CST) will not only reduce the cost of locally manufactured goods and services, but will also increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports.  

Speaking at the FIEO meet, MSME Secy KK Jalan said exporters should take advantage of the MSME schemes and the Commerce ministry on its part should provide more incentive-based schemes to those sectors that create more employment. 

SC Ralhan extolled the growth of exports with numbers reaching double digits in the month of February alone. He was confident with the given trend, India’s exports may reach $270 billion by the end of this fiscal. 

 

The Dollar Business Bureau - Mar 31, 2017 12:00 IST
 
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