EXPORTERS FORESEE TURBULENT TIMES AS DBK RATES DECLINE

INDIA NEWS

EXPORTERS FORESEE TURBULENT TIMES AS DBK RATES DECLINE

July 27, 2017



Due to new taxation policy from 1.7.2017, all garment exporters have to bear heavy loss with GST refund or Drawback 6.6%. As per the new law the composite rate of Drawback on garments at present is approximately 9.5% (Customs 2.5 % + Excise 5% + ROSL 2%) which is valid till 30.9.2017 only. From 1.10.2017, Drawback rates may be zero% or max 2.89%(customs 2.5% + ROSL .39%)

These composite rates are valid for the period 1.7.2017 to 30.9.2017 only subject to either input credit /refund under GST will be given or DBK of composite rate will be given. Exporters cannot avail both i.e input credit / refund under GST & DBK composite rate 9.5%. In fact, they have to to produce certificate from jurisdictional GST officer as per invoice or certificate on monthly basis after filing GST return to avail composite rate on all goods being shipped on or after 1.7.2017 irrespective of shipments cleared under composite rate 9.5 % or under low rate 2.89% (customs rate 2.5 % + ROSL .39% ). In case exporter is unable to produce requisite certificate for claiming composite DBK at the time of export , then shipping bill will be passed on lower rates customs part only at the time of export. Exporter can claim balance amount of DBK as supplementary claim after producing required certificate. Even if Shipping bills are passed under composite rate from all ports in India, composite rate will not be credited into account without certificate from jurisdictional GST. This means that the industry is nearing tough phase and the GOI has to be convinced that this could be a major shock for the industry. When Tea, Perfect Sourcing interacted with Ashok Rajani, Chairman, AEPC he said, “This is the current status, however, AEPC is aggressively engaged with the Government to restore drawback rates due to embedded taxes which are not subsumed under GST.

Taking above into consideration, let's unite & protest against Govt new policy.