Tirupur Exporters’ Association has urged the Centre to extend the integrated goods and services tax (IGST) exemption period for import of capital goods under Export Promotion Capital Goods (EPCG) scheme beyond March 31, 2019, for another two years. They want the exemption for import of inputs under Advance Authorisation scheme, too.
TEA president Raja M Shanmugham has written to the Union commerce ministry stating post GST roll-out, the association had sought the exemption. Considering the needs of the sector, the Centre had been extending the exemption term, phase-wise (for six months’ period each), since July 1, 2017. The current phase ends on March 31, 2019.
The garments sector in Tirupur, comprising mostly MSMEs, is upgrading its operations to improve the quality of garments and increase productivity, in keeping with the growing demands of buyers. The several operational units here are increasingly expressing concerns over the imposition of IGST beyond March 2019 as they fear the tax amount paid for importing capital goods would not be adjusted.
“The units are confused whether to place orders with machinery suppliers by presuming that the exemption period would continue beyond March 2019 or to wait for further clarification from the government,” Shanmugham wrote to the ministry.
Once the election code of conduct is announced, and in case if the IGST payment exemption notification is not issued by then, it would be a big setback for the MSMEs, he said. Shanmugham sought commerce minister Suresh Prabhu’s intervention in this regard.