Commerce secretary Rita Teaotia on Tuesday said the roll out of the goods and service tax (GST) from July 1 would not have any adverse impact on exports. “Since exports are zero-rated, there will be no adverse impact,” Teaotia said, addressing a press conference after the second meeting of the Board of Trade.
The mid-term review of the Foreign Trade Policy (FTP) to be unveiled soon will reflect the GST-related changes for exporters. An exporter will need to pay the applicable taxes on transactions but can seek refund. Tax exemption is not given to them as it could break the GST chain, preservation of which is necessary to avoid cascading of taxes.
India’s exports grew at its fastest pace in the last five years by 4.7% to $274.65 billion in the financial year 2016-17.
The FTP review would be completed in time for the launch of GST, said Teaotia.
The second meeting of the 70-member Board of Trade, country’s top advisory board on trade, was held under the chairmanship of commerce & industry minister Nirmala Sitharaman on Tuesday.
“The objective of the meeting was to seek inputs for the review of FTP. Exports have revived and need support to grow,” Teaotia said.
She said many export promotion councils sought additional support through MEIS Scheme, through interest subventions schemes and some other schemes under FTP.
Discussions over market access and market development along with need to extend additional support to export promotion councils were taken up in the meeting. Discussion over issues related to e-commerce reflected in the FTP, she said, adding that many suggestions through which e-commerce can be facilitated have been taken note of by the department.
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Issues related to EXIM credit as well as insurance covered to exporters in order to enable them to access lower cost credit to facilitate exports was discussed.