GST benefits for small and medium exporters may come soon

The government may soon roll out duty drawback on goods and services tax (GST) to benefit small and medium exporters after fault lines increasingly surfaced in India’s exports despite high growth in May and June this year.

The rollout is expected from October 1, along with an e-wallet scheme, as job creating exports sectors such as leather, handicrafts, handlooms, carpets, textiles and gem and jewellery have continued to decline despite merchandise exports clocking 20% growth in May and nearly 18% in June this year.

Ganesh Kumar Gupta, president, Federation of Indian Export Organisations, told DNA Money Gupta said a three-member committee headed by G K Pillai, former home and commerce secretary, is working out the GST duty drawback rates and is expected to submit its report in the next few weeks. After vetting, the government is likely to roll them out from October 1.

The Pillai committee was set up after a parliamentary standing committee pitched for fresh concessions to labour-intensive exporting sectors to mitigate compliance burden in transitioning to the GST regime.

Gupta said e-wallet scheme too is expected to be announced by October 1. Under the e-wallet mechanism, a notional credit would be transferred to exporters’ accounts based on their past record and the credit can be used to pay taxes on inputs.