Owing to delays in refund of taxes under GST regime, exporters including the Micro, Small and Medium Enterprises (MSMEs) have been facing challenges, in order to deal with this issue, Commerce and Industry Minister Suresh Prabhu said introduction of e-wallet mechanism will effectively address the concern.
Prabhu said that secretaries in the commerce and finance ministries are taking all possible measures on this matter.
He further said that e-wallet can effectively address this issue because exporters do not have to pay and seek refunds as notional credit would be transferred to exporter’s accounts automatically based on their past records and credit can be used to pay tax on inputs.
Talking to KNN, Badish Jindal, President of MSME body FOPSIA said that the industry have been facing the issue of blocked refunds under the new taxation.
With the blocked taxes, it is becoming impossible for the production cycle to run, he added.
Commenting along similar lines, Sunil Vaish of Indian Industries Association (IIA) informed that the refund of exporters has been stuck from a long time with interest piled up which has led to the shortage of working capital. Government should resolve the issue of refund as soon as possible.
Federation of Indian Export Organizations (FIEO) mentioned that e-wallet could not only solve the problem of liquidity but also exporters may use it like a running account where money will be debited from e-wallet when duty paid supplies have to be undertaken and the amount is credited when the proof of exports is made available.
Exporters raised that delay in refund of taxes for months posing serious problems for them as their working capital get blocked which is also affecting shipments.
The Goods and Services Tax (GST) was rolled out from July 2017, following which exporters across sectors have raised he concern of blocked capital due to delay in refunds.