The government must make all efforts to implement the e-wallet scheme for exporters by October as any further delay will have adverse consequences for exports, a Parliamentary panel said in its report today. Also Read - Buy now, pay later: Why micro-credit is exactly what India needs right now
It said the GST refunds are still not coming to the exporters in an expeditious manner. Also Read - WhatsApp not authorized to go live with UPI full scale operations, RBI tells Supreme Court
Under the e-wallet mechanism, a notional credit would be transferred to exporters’ accounts based on their past record and the credit can be used to pay taxes on inputs. Also Read - WhatsApp Payments: How to set up, invite and send money to your friends
An estimated 15-20 per cent of the working capital is already stuck up with the government for refunds, the Department Related Parliamentary Standing Committee on Commerce said.
It is important that the stuck up capital is released expeditiously and the situation must not be allowed to deteriorate any further, it added.
“It is felt that if the stuck up capital reaches a figure of 20-25 per cent of the working capital then it will result in a steep downward spiral of our exports. Such a situation will break the backbone of our industry and exporters will be demotivated to do business,” the report said.
It added that problem of delayed GST refund to exporters has caused hardships to the exporters.
The committee recommended that the government “must make all out efforts to implement e-wallet scheme by 01.10.2018 positively. Brooking any further delay on the issue will have adverse consequences for our exports”.
“If the taxes are to be finally refunded then what is the need to put the exporters to the rigmarole of paying taxes and taking its refund or taking refund of unutilized input tax credit,” it said.
The report added that it is easy to pay tax but it is very difficult to get a refund.
“A system may be devised to ensure that the procurement/ manufacture for export purpose may be exempted from taxation system,” it suggested.
It stated that country cannot afford to wait and watch the impact of GST on exports after the lapse of considerable period.
“India’s export is deeply intertwined with employment and rolling of machines in MSME sector. So it’s a bounden duty to ensure that export sector remain healthy and vibrant,” it added.
This is published unedited from the PTI feed.