New Delhi : Commerce and Industry Ministry on Tuesday pressed the GST Council to keep exports out of the GST framework and levy lower taxes on labour-intensive sectors like leather, cement and plantation.
In their contention before the all powerful GST Council, the ministry officials argued the need for granting an “ab-initio” exemption from Goods and Services Tax (GST) for exporters saying that the process of seeking tax refunds erodes their working capital. Moreover, they stated that in view of tough global situation it is imperative to encourage exports.
Briefing reporters, Commerce and Industry Minister Nirmala Sitharaman said refund of taxes takes about six to eight months and hence it is necessary to “give an ab-intio exemption”. She asked the council to treat exporters in such a way that they do not have to pay taxes upfront.
“…it (GST) should not become a newer liability in the heads of exporter…we do not want the exporter to suffer twice,” she said. She also underlined the need for encouraging labour intensive sectors like cement, leather and plantation crops and suggested that either they should be completely exempted from the new tax or be taxed at a low rate. For leather industry, she said, “We wanted to ensure that if they can be given a complete exclusion from taxation because they have to generate lot of employment”.