Exporters call GST a 'mini social crisis', ask govt to avert it

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SME Times News Bureau | 20 Sep, 2017
Calling on the Central government for urgent steps to avert a "mini social crisis", exporters on Tuesday said the inordinate delay in getting Goods and Services Tax (GST) refunds was causing difficulties in paying salaries and Diwali bonuses to their workers owing to the working capital crunch.

The exporters' bodies conveyed their concerns at a meeting here with Revenue Secretary Hasmukh Adhia, who is chairman of the Committee on Exports to address GST-related problems.

"All this is happening when we are in the middle of festival season, and the workers employed in the trading and manufacturing units have to be paid their dues including Diwali bonuses," P.K Shah, former Chairman and currently board member, Engineering Exports Promotion Council (EEPC), said in a statement following Tuesday's meeting.

EEPC said the authorities should release at least 90 per cent of refunds immediately after the shipments and allow the verification and adjustment be done at a later stage.

"This will help small and medium exporters to tide over their blockage of funds, and allow them to pay salaries and bonuses of workers in the festival season. Our members have pointed out that they are in a desperate situation and hence the government must intervene to avoid a mini social crisis," it said.

The Federation of Indian Exports Organisations (FIEO) pointed out that the deferment in mandatory filing of GST return forms, as well as extreme difficulty in receiving tax returns, was hurting exports.

This may lead to a Rs 65,000-crore worth of exports being stuck by the end of the year, FIEO Director General Ajay Sahai said.

Order books of exporters have taken a hit two months after the roll-out of the GST regime, with estimates putting the impact to up to 15 per cent across industries and product categories.

According to an assessment by the FIEO, the large fall was in export orders that were meant to be delivered until October. Beyond October, this may rise to 20 per cent, as exports during Christmas and New Year may be affected, the association said.