Commerce Department to address exporters’ GST concerns

The move aims to address concerns surrounding compliance, refunds, and audits, with the goal of expediting grievance resolution, reported businessline. A key issue that has come to light involves exporters receiving show-cause notices from GST authorities for payment of GST on overseas bank charges, along with interest and penalties. This development contradicts a previous GST Council decision that such charges should be paid by Indian banks.

The ongoing Red Sea crisis has further complicated matters for exporters, leading to calls for an extension of the current 90-day time limit for EGM (Export General Manifest) filing. This extension is particularly crucial for merchant exporters procuring goods at the concessional GST rate of 0.1 percent.

“The Commerce Department has requested input from various export bodies regarding their GST-related difficulties. This information will be compiled, analysed, and presented to the GST Council and Finance Ministry for further action,” a source revealed.

In a parallel move, the Federation of Indian Export Organisations (FIEO) has submitted a detailed account of exporters’ GST-related challenges to Finance Minister Nirmala Sitharaman, seeking resolution.

The FIEO’s submission highlights the June 2022 GST Council meeting, which determined that GST on overseas bank charges should be paid by Indian banks as the recipients of these services. The exporters’ body has requested the Finance Minister to instruct the Central Board of Indirect Taxes and Customs (CBIC) to issue clarifications to GST authorities to halt the issuance of show-cause notices and demands.

Another pressing concern is the current 90-day time limit for exports and EGM filing in cases where merchant exporters source goods from manufacturers at the concessional GST rate. The Red Sea crisis and subsequent logistical challenges have made meeting this deadline increasingly difficult. In response, the FIEO has requested an extension of 60-90 days, to be granted on a case-by-case basis by jurisdictional authorities.

As these issues continue to impact the export sector, the Commerce Department’s initiative to address GST-related concerns is expected to provide much-needed relief to exporters facing compliance and operational challenges