The government should extend the pre-GST duty drawback rates until June 2018 or till the revenue department comes out with the revised rates for exporters, according to a report of the Standing Committee on Commerce.
The report on the impact of Goods and Services Tax (GST) on exports was tabled in the Parliament on Tuesday.
It said a formal mechanism for grievance redressal of exporters must be put in place.
"In order to bring relief to the exporters, the Committee recommends that the Department of Revenue, Ministry of Finance extend the pre-GST duty drawback rates till June 30, 2018, or till such time the Department works out the revised duty drawback rates."
GST was implemented from July 1 this year across India.
The sudden withdrawal of the incentives extended earlier under Duty Drawback Scheme will lead to the collapse of labour-intensive industries. This will have a cascading effect on employment and livelihood of poor workers in these industries, the report said.
"The Committee hopes that this will enable the exporters to overcome the problems being faced by them currently besides helping them to take a long-term perspective while negotiating export orders," said the parliamentary panel said in the report.
Goods and Services Tax (GST) refund mechanism for exporters is tardy and cumbersome owing to several operational issues.A simplified system for the filing of refunds needs to be devised which is in line with the ease of doing business.
Observing that structurally GST is a much better taxation system than the earlier tax regime, the committee said, "teething problems have been there and there is a feeling that what was thought as the grand idea of GST on the ground, the implementation has not been proper".
An absence of enabling provision resulting in the denial of credit of countervailing duty and special additional duty in case of non-fulfilment of export obligation may be addressed on priority.
Also, in cases of 'High Seas Trade', where the goods never enter India and are directly delivered to the customers outside India on the instruction of Indian supplier, it would be preferable that such transactions are kept outside the purview of GST in India.
The report said the Committee is certain that the government will take all corrective measures in the present taxation system to ensure a sustained growth trajectory of our exports.
SOME RELIEF
- GST refund method is tardy and cumbersome owing to several operational issues
- A simplified system for the filing of refunds needs to be devised which is in line with the ease of doing business
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