In a slew of measures to provide relief to exporter hit hard by the implementation of Goods and Services Tax, the GST Council today decided to bring in an e-wallet facility after six months to speed up their refund claims, council member and Kerala Finance Minister Thomas Isaac said.
In a slew of measures to provide relief to exporter hit hard by the implementation of Goods and Services Tax, the GST Council today decided to bring in an e-wallet facility after six months to speed up their refund claims, council member and Kerala Finance Minister Thomas Isaac said. Further, the government has also decided to exempt exporters from IGST for next six months, Thomas Isaac said on the sidelines of the crucial GST Council meeting underway in New Delhi.
Thomas Isaac said that the government aims to implement the e-wallet facility by March. Till then, exporters will continue to get pre-GST exemptions, J&K Finance Minister Haseeb Drabu added. Exporters need to pay IGST on import of their inputs, and claim refund from the government under rules.
The transitional credit refund claim by taxpayers in the first month of July was staggering Rs 65,000 crore, including thousands of crores of rupees from exporters. The government estimated that only Rs 12,000 crore as valid. Rest of the amount is under scrutiny, which has made exporters nervous. Exporters fear that if the GST refund of about Rs 65,000 crore does not start flowing immediately, it would get stuck and, further deteriorate their liquidity situation. The industry representatives, including exporters, who met Finance Minister Arun Jaitley last week raised this issue. An ‘e-wallet’ facility will allow exporters to get tax credit immediately after self-declaration post exports.
Thomas Isaac also confirmed that the GST Council has decided to raise the revenue threshold under the composition scheme to Rs 1 crore from Rs 75 lakh at present. This is expected to bring big relief to many more small businesses, who will have the convenience of paying a flat rate of 1%, 2% or 5%, and avoid a lot of paperwork. Albeit, this might also come as a disappointment to many, as it was being widely speculated that the limit would be raised to Rs 1.5 crore in today’s meeting.
The 22nd meeting of the GST Council is underway in New Delhi today. The meeting is third since the implementation of the Goods and Services Tax in July this year. The council, headed by Finance Minister Arun Jaitley, is likely to provide wide ranging relief to consumers and business owners alike by taking measures to simplify processes, reduce compliance burden and recalibrate tax rates.
The council is expected to heed the call by small businesses to lower the compliance burden by allowing them to file returns only once in a quarter instead of once every month as is required at present. Further, for exporters reeling under tight liquidity conditions due to tax refund claims aggregating to Rs 65,000 crore stuck with the government, the GST Council may take immediate steps to speed up the refunds or relax the working capital requirements, in addition to introducing e-wallet facility as well.