The Centre will tweak SEZ and foreign trade legislations to make them compliant with the proposed Goods and Services Tax (GST) which would form the backbone of indirect tax reforms in the country soon, an official said.
“Suitable changes will have to be made in SEZ and foreign trade Acts to make them compliant with GST. Many DGFT schemes will have to be moderated as well,” Commerce Secretary Rita Teaotia said today.
Speaking on India’s foreign trade at a CII event here, she said GST would be a game changer by virtue of which the country’s GDP would increase by one to 1.5 per cent.
“On GST implementation, exports of goods and services will not attract taxes and the government is committed on zero-rating of exports,” Teaotia said.
The official said GST would also reduce the cost of locally-manufactured goods and services and also bring down logistics cost.
“Services will also get a boost. We will work together with the department of revenue to address all of them,” she added.
Teaotia said the government has engaged some legal experts to study the implications of GST on exports. In the last budget, there was tinkering with the margins as GST was coming.
Batting for SEZs, she said, “we may be stressing more on SEZs and encourage more industry to be operating from there. It is the SEZs which have bucked the trend of falling exports.”
She said the government was also carrying out an exercise on denotification of SEZs.
On trends in international trade, Teaotia said multilateralism was giving away to mega regional trade blocs which were now dictating global agreements.
India was now considering 19 such agreements which were either in the form of PTA, FTA or CECA, she added.