GST : Export Shipment Clearance Issues
GST: Export Shipment Clearance Issues
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No doubt that GST is a Landmark mark tax reform and
reform of this magnitude has never been carried out in past in any country
impacting life of more than 1 billion plus population. Extensive consultation
has been done in past more than a decade by all political parties to give India
"One Tax" which is GST. Government and all Political parties should
be appreciated to overcome the differences in the Interest of development of
India. Now, Subsequent Implementation will be a key factor in a successful implementation
of the world's largest tax reform. GST will bring transparency through a robust
IT system. It will no doubt broaden the base and tax collections not only under
Indirect Tax but under direct taxes, too. The general perception by some is
that under GST prices will come down whereas some other thinks that prices will
increase. Even GST practitioners might not have clear picture as GST law is
very new, under implementation and too big to understand. Government will need
to be on people’s side and address every problem in GST implementation with
fairness and persistence. Government officers will need to show respect for
both authority and towards assessees. Impetus should on detecting and dealing
with taxpayers who will deliberately avoid their GST obligations.
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.
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