In addition to Foreign Trade Policy (FTP) that was earlier introduced to boost the exports of goods and services and to increase employment generation in the country, the central government on Tuesday extended support to exporters to help deal with implementation burden of the new Goods & Services Tax (GST) regime. Concerned over the delays in refunds under the GST, the government today rolled out e-wallet plan for exporters under GST from April 1. The exporters will avail refunds after correct returns are filed. The government has disbursed Rs 451 crore in refunds for exporters and issued GST notifications to address working capital concerns of exporters. The mid-term review of the much-awaited policy was released at an event attended by Union Minister of Commerce & Industry Suresh Prabhu, along with top officials including the directorate general of foreign trade Atul Chaturvedi, commerce secretary Rita Teaotia and revenue secretary Hasmukh Adhia. Director General of Foreign Trade said that the focus is going to be on ease of trading. Aiming to nearly double India’s exports of goods and services to $900 billion by 2020, the government had announced several incentives in the five-year Foreign Trade Policy for exporters and units in the Special Economic Zones in April 2015.
Exporters have been voicing concerns about challenges on account of implementation of the goods and services tax (GST), even suggesting that they be kept out of the ambit of the new indirect tax regime and the drawback refund be expedited as it was blocking their working capital. The mid-term review was earlier supposed to be released before 1 July, in line with the introduction of GST. However, it was put off as the government wanted to factor in the feedback from exporters based on their experience with GST. Exports entered the negative terrain after over a year, contracting 1.12% in October, primarily due to liquidity problem being faced by exporters following roll-out of GST.
The five-year FTP was announced on 1 April 2015 and set an ambitious target of India’s goods and services exports reaching $900 billion by 2020. It also aimed at increasing India’s share of world exports to 3.5%, from 2%. The Commerce & Industry Ministry recently enhanced the rates of incentives under the Merchandise Export from India Scheme (MEIS) for garments and made-ups to 4% from 2% till June 2018 to help exporters struggling under the implementation burden of the new Goods & Services Tax (GST) regime.