Reviewed FTP to be released in September to factor in GST
The Dollar Business Bureau
Ministry of Commerce and Industry said on Thursday that it has decided to release the reviewed foreign trade policy (FTP) in the month of September and not prior to the rollout of Goods and Services Tax (GST) as was earlier planned.
Earlier, the Government had announced that it will release the FTP’s mid-term review in line with the rollout of GST before July 1.
“A number of representations have been received from exporters regarding GST. Accordingly, it has been decided to release the reviewed FTP in September. This will allow the government to factor in the exporters' feedback on relevant issues post-GST,” according to a statement from the Commerce Ministry.
As it is not possible to stay with the prevailing schemes in their original forms with the implementation of GST on July 1, the Government has to come up with the required changes in those schemes through certain notifications.
The Ministry has sill to revise the export target of $900 billion by 2020 as set earlier and is also considering the possible impact of GST on the exporters’ community, said the officials.
In the financial year 2016-17, exports from India aggregated at about $426 billion.
The review of FTP is intended at taking corrective measures by evaluating the effect of export incentives on various sectors.
Currently, there is an exemption for exporters for paying basic customs duty, countervailing duty (CVD) and also special additional duty (SAD) on the imports of inputs under different schemes. However, after the introduction of GST, exporters have to pay Integrated GST (which will replace SAD and CVD) and will receive it as a refund within a particular time period.
Even schemes like Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS), which is currently, provide for duty-free scrips for a wide range of duties on inputs, such as excise duty, customs duty, and service tax, may be impacted.
Exporters raised the concerns that by not getting exemption under GST may lead to blocking their working capital and also create problems, specifically from MSMEs.
Previously, Commerce & Industry Minister Nirmala Sitharaman had said the review of FTP would be focused on propelling small and medium enterprises (SMEs), which create jobs, and also to look at the prospects of increasing the possibility of rupee trade by involving into the mechanism of currency swap with the countries of South-East Asia.
Federation of Indian Export Organisations (FIEO) has estimated that the country’s exports would reach $700-725 billion by 2020.
Prime Minister Narendra Modi will officially usher in the new GST regime from the midnight of June 30.