Implementation of Goods and Services Tax (GST) from July 1 would help reduce cascading effects of multiple taxes, lower cost and make exports more competitive, a top government official said today. Commerce Secretary Rita Teaotia said the two main export promotion schemes – Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS) – will continue post GST implementation but would be aligned with the new indirect tax regime. The commerce ministry, she said, is reviewing the validity of the scrips and export obligation periods to make them more realistic and aligned with GST network so that there is a seamless process of extending benefit to exporters.
She was addressing exporters at an event organised by Federation of Indian Export Organisation (FIEO) in Mumbai. Exporters get duty/tax credit scrips under the incentive schemes. These are kind of certificates which can be used to pay duties including import taxes. Due to introduction of GST, “there will be low effect of duty on many items, reduction in cascading effects of multiple taxes despite the apprehensions felt by the EXIM (export- import) community, ultimately resulting in lowering the cost and making our exports more competitive,” FIEO said in a statement quoting Teaotia.
Speaking at the event, FIEO President Ganesh Kumar Gupta said duty drawback rates may now only cover the basic customs duty on the inputs.