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Last updated: 27 Jul, 2017  

Exports.9.Thmb.jpg GST: Export shipment clearance issues

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Bikky Khosla | 25 Jul, 2017
It is not unexpected at all. Since the GST coming into force beginning this month, in fact, much before than that, everybody --  despite admitting that the new tax regime is a long-term opportunity -- has been talking about possible disruptions, which now seem to be slowly rearing their heads, and like many other sectors our exporters are also facing the heat. Reports have poured in over the past few weeks of export consignments lying at ports or factory gates as custom officials are yet not clear about the new rules. Needless to say, the sooner these concerns are sorted out, the better it is for the sector.

Earlier this month, the Finance Ministry relaxed rules for exporters allowing them to continue shipments under existing bonds and letters of undertaking till July 31 and submit bonds or LUTs in the revised format for GST by the end of the month. This was a welcome step, but several new reports suggest that the situation has changed hardly and there is still a lot of confusion at the ground level as custom officials are interpreting this notification any way they want. Some exporters have also pointed out that there is no time-limit prescribed by the CBEC within which LUTs and bonds have to be accepted, and so custom officials are showing no eagerness to prevent delays.  

Meanwhile, several industrial sectors have raised their concerns about the challenges and irritants they are facing after the rollout of GST. Textile traders, particularly in Surat, are staging massive protest demanding roll-back of the 5 percent GST levy on the sector, which was earlier exempt under the previous indirect tax regime. The Carpet Export Promotion Council has claimed that shipments of handmade carpets and other floor coverings have been hit badly due to imposition of high tax on job works. Handicraft merchants of Udaipur and the plywood industry in UP are raising similar concerns.

According to latest foreign trade data released, exports grew by 4.39% to $23.56 billion in June. While these figures are encouraging, it is difficult to ignore the fact that 15 out of 30 major product groups showed negative growth in the month while in May, 21 out of 30 of these product groups registered positive growth. The situation may worsen further considering the challenges being faced by our exporters and the sectors which are of great importance from exports and employment perspectives.  The next GST Council meeting is scheduled on August 5. It will be interesting to see how the council addresses these issues.

I invite your opinions.
 
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bank guarantee and bond for export of services
viswanath | Mon Sep 18 00:36:15 2017
most irritating rule..why should someone assume that 18% GST is levible on export (which is zero tax) and then get a bond/guarantee? waste of time and money and no application of mind by bureaucrats who are living in ivory towers ..Does India want exporters of service and earning foreign exchange to be harassed for bonds etc?? what a waste of time.the rule should be withdrawn for service exporters so they can bring in foreign exchange without running behind banks and bond paper salesmen..Modi govt is making life difficult for small service providers earning foreign exchange.


ROLLBACK OF GST ON EXPORTS
gurmeet singh | Tue Aug 22 06:15:24 2017
Even our buyers are refusing to place the new orders. Because fob prices are going up sharply.


Export under Bond or LUT
R P KAUSHIK | Thu Jul 27 18:23:50 2017
What will be stamp value for execution such documents.


GST --- How Good & Simple ?
Rizwan | Thu Jul 27 08:57:53 2017
It reminds me of old school days story about .. " Nakalhci Bandar " . Without knowing pros & cons of the subject, with intentions of going down as great all time reformer in history books both P.M. & F.M. has simply created Chaos in the nation. Hitting the bell with the GONG at midnight in Parliament will not serve the purpose. Someone should ask these 2 M , what have they got ? how much they have gained after Demonetization ? Implementation of GST is humongous exercise, it requires lot of homework to be done. Please Please ... Someone should go & tell Government try & make GST - Good & Simple.


ARE - 1 transaction for merchant exporter
Chandan De | Thu Jul 27 08:06:57 2017
Dear Sir Can you please explain after GST application how we can get TAX benefit . Initially purchase from MFG & sell to outside India we will done under ARE 1 transaction where we should not need to Pay EXCISE / SALES TAX etc . But now what do we need to do for merchant exporter .


LUT / BOND on exports for Service industry.
Vijay | Thu Jul 27 07:38:58 2017
From 1.7.17, department needs Bond along with LUT. The companies above 1 Cr of exports will get advantage of LUT and they need not give any bank guarantee of 15 % on IGST. The Smaller SME companies who have little exports / try to make in India, has to actually give bank guarantee. Its blow to small exporters of services where the earlier procedure was simple. Now we have to invest in bank guarantee to get exports done. i feel, the advantage has been passed to big export houses. and struggling SMEs are not spared.


GST cripples small artisan trade and export
Uday Pasricha | Thu Jul 27 05:59:33 2017
Since GST is linked to raw material with no consideration to end usage or process of manufacturing, any added value hand process will shut down if GST rate is above 5% as in case of tens of thousands of craftsmen who make any marble craft for Mandirs, idols or any other. Having 28% GST with nothing to set off since raw material purchases are made in small values and constitute less than 25% of finished product. For this while composite registration is mentioned as easy way out the strange restriction of not allowing export or sale outside state is not logical. Limit of 50 lacs is very acceptable including local and export as this could create tens of thousands of small exporters freeing craftsmen from the control of middle men.A flat 5% GST would be acceptable with no set off to allow creative designers and craftsmen to become direct sellers and exporters while staying within the 50 lacs limit. This will create 1000's of small exporters who have for decades been shackled by restrictions, sales taxes and procedures.


Rate of GST and HSN Codes
Dr Mukesh Desai, HSM Foods International Private Limited, kumar@maniarrs.com, 91 99137 41854 | Thu Jul 27 05:53:47 2017
How much GST to charge on Khakhara, Khari, Khichiya, Papad, etc food products under what HS Codes require to be clarified.

  Re: Rate of GST and HSN Codes
Sardar inderjeet Singh | Sat Jul 29 05:13:57 2017
I want noodles manufacturer so how much GST for manufacturer ...please tell me...


Export shipment clearance issue
ANIL KAUL | Thu Jul 27 05:09:22 2017
The CHOR business practices are to be done away. There are always some teething issues with any new system. In domestic trade everything is smooth. Govt intentions are honest with an eye on the welfare of poorest of the poor. We must come forward and happily participate in this noble cause of nation building. NO BACK TRACKING POSSIBLE, SO WHY CRY.?

  Re: Export shipment clearance issue
Imran Hanwari | Thu Jul 27 08:45:51 2017
We are not talking about opposition to GST. GST is much needed and hopefully teething problems will be sorted out. The problem is lack of planning on the part of the Government. All the while they are talking to Business people to prepare for GST, but they forgot to tell their own departments. The training for Government officials should have been at least a year in advance. Now exporters run everyday just to sort out issues instead of focusing on exports. Personally I expect at least till September end before almost everything is clear. That means most probably our exports will be suffering for the next 3 months.


Fact
SEETHARAMAN.M | Thu Jul 27 05:04:02 2017
After GST, every day the Range office of central excise was not sure about procedures and all the exporters are running between pillars. One day to divisional office, another day to CA, another day to Bank to get realisation certifications, B17, etc. Same work did already. Correction of Tax regime, is our own Indian Issues, we (exporters) cannot able to explain to overseas customers. So allow all export activities as it is. if needed with self declaration letter / understanding. Not push all entrepreneurs (who are doing business in genuine) to look for some other activities because of these new law.


Confusion
chanish | Thu Jul 27 04:20:17 2017
There are a lot of confusions, which are not being addressed by the authorities. For example, HSN Codes for several products are not available (in the entire list/chapters), and despite referring to gst.gov.in repeatedly (at least 10 emails sent to them), during the last 4 weeks, there is absolutely no response whatsoever. If proper HSN code is not available, how do we conclude the GST applicable ?????? What then happens to our billing ???? Who will take responsibility if the GST collected therein is less than actually applicable ??? Unfortunately, there is none to answer these relevant issues. Wish you could help !


GST - The mess created due to bad planning
Dr. Major. KL Chandrasekhar | Thu Jul 27 04:18:17 2017
Every new initiative should be rolled out by test marketing followed by refinement to fix glitches. The roll out of GST, has been deliberated for nearly an year by the Government, without an iota of thinking, as to what all could be the bottle neck areas. That is why a Systems approach in management is very important. Had the Government mandated, each of the tax collecting Organization under its fold to conduct and train the staff for its new initiative of GST, this confusion will not have surfaced.


Above story
Rajesh Kumar Mishra | Thu Jul 27 01:50:30 2017
GST should have levied in stages by developing infrastructure and giving training to businessmen, transporters and CA. Three time filing in a month must be relaxed. It should be in one go and if any difference is to be paid it should be allowed in next month without interest and penalty. Regarding input credit it must be a fool proof system that it is credited immediately. What is remedy for those bottom line traders/manufacturers. Suppose bottom line party is not filing his return on time whether input credit will be given to honest tax payers. If bottom line vendor/ manufacturers /traders shuts his shop how the input credit will be given. This chain system will work only when each party involved is paying tax on time. Otherwise lots of money of tax payers shall be blocked and business is likely to collapse. How to get input credit while dealing with unregistered vendors and traders. There must be fool proof remedy for honest tax payers.


Terry towel exporter
Nazim N Khan | Thu Jul 27 01:29:27 2017
I am not able to understand the GST scheme properly according to our sources it is been heard that our drawback was 7% after GST it is 2% we have a good volume of business and we are star export house due this our July month sale is almost zero.


ROLL BACK GST ON EXPORT
VISHNU ARORA | Thu Jul 27 01:03:01 2017
I REQUEST TO F.M PLEASE ROLL BACK GST ON EXPORT PRODUCTS. WE HAVE TO COMPETITION WITH CHINA AND OTHER COUNTRIES THEIR PRODUCTS ARE CHEAPER THAN INDIA. OUR MARGIN 5% TO 7% GST 18% MEANS WE SHOULD STOP EXPORT BUSINESS.


Export shipment clearance issues
not important | Wed Jul 26 22:17:28 2017
1 Any rule before enforcing there must be involvement of education sector to inform, train, and give time frame to implement in steps as appropriate. 2 There should be the extra team of specially trained staff to send for problem-solving with full decision making permissions. 3 Government circulars for implementation guide for implementation of new rules.


Exempted sale
Vishnu verma | Wed Jul 26 19:33:19 2017
I have booked rs 2000000(twenty lacs) Rupees order in may 2017 for brass handicraft items & take 70 days for delivery time Against (H)FORM SALE. Today my production r reddy but my buyer not interested to take delivery because in GST government cancelled farm H. My buyer is ready to cancel all order because he can't pay tax.

  Re: Exempted sale
Rajesh Garg | Thu Jul 27 06:36:31 2017
It is very sad to see that Govt had finished small and cottage sector by GST. Earlier this sector was enjoying a excise free upto 1.5 carore and was in position to compete large sector but in present circumstances this sector will be compelled to close there ventures. Govt is showing his willingness for social health but in GST they imposed 12% without considering the fact that most of units are in excise free zone and the benefit of this is directly passing to the consumers. Carpet and handicraft industry was enjoying no tax as it is completely run for the benefit of economically weaker section. So it can be said that govt rolled out GST in hurry and without complete homework. Therefore Govt should suspend this GST upto March 2018 meanwhile clear all confusions by taking required steps for all sections of people of India.


 
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