Indian exporters have urged the government to expand the rupee payment mechanism to more countries and restore the 18% exemption on the export goods and services tax (GST) amid signs of a sharp decline in the global trade by the World Trade Organization (WTO). . business next year.
With the exemption expiring on September 30, exporters will have to pay GST on exported sea freight, which traders fear will adversely affect overseas shipments and add to liquidity challenges. The Federation of Indian Export Organizations (FIEO) said during a meeting with Commerce Minister Piyush Goyal on Friday, “Non-extension of notification regarding GST exemption on freight for exports has added to the liquidity challenges of exporters.” Exporters said overseas freight has jumped 300-350% from pre-Covid levels and despite a slight improvement in rates of late, it is still 200-250% higher than 2019 levels. GST on export goods is revenue-neutral as exporters can claim refund after making the payment. Withdrawal of exemption may increase liquidity for the government, but it will be at the cost of exporters, FIEO said. “Since the cost of credit for exporters is very high, the relaxation will help the export sector. Better liquidity, which is the need of the hour.” Highlighting the healthy growth witnessed in some markets like Latin America and Africa, it was informed that the evolving economic and geopolitical environment requires the industry to be alert and optimistic so that growth opportunities in such new markets are not missed. , said the Ministry of Commerce and Industry. “The industry participants were assured that the government was committed to address the issues raised by them. Minister Goyal urged the industry to introduce new marketing methods, raise quality standards and take full advantage of free trade agreements to achieve higher export growth this financial year. On the tightening of liquidity conditions globally, exporters urged the Center to introduce an export refinance facility on the grounds that interest rates are too low in many competing countries.
The FIEO said that the increase in the repo rate has an impact on the base rate of banks and consequently the lending rates for export credit.
“The base rate of SBI was 8.7% which is likely to be 9.4% after the increase in the repo rate. Base rate of many banks will be much higher than the base rate of SBI, which will increase the export credit rate in rupee.” ..
catch all corporate news And updates on Live Mint. download mint news app to receive daily market update & Live business News,