Traders were selling out old stock, and the only pattern in GST collection was that could be discerned was from was services. If this trend persists, the short-term liquidity mismatch can seriously hamper future prospects of these firms, as India Ratings and Research has pointed out.
Merchant exporters will now have to pay nominal GST of 0.1% for procuring goods from domestic suppliers for export, the finance ministry said in a tweet.
Besides, the GST Council also decided that entities dealing in gems, jewellery and other high value goods, having an annual turnover of over Rs 2 crore, will no longer be under the purview of the Money Laundering Act.
"The reverse charge mechanism will be reviewed by a committee of experts".
"The main problem of the exporters that was discussed was that there is no taxation in exports, because when you export, you can't export taxes, because they become non competitive". The move will ease the compliance norms for small businesses. MSMEs requested the government to suspend this requirement for some time.
Smaller enterprises - which provide a third of the country's GDP - have been particularly critical of the massive changes rippling through India's economy, fearing they will be unable to comply. According to government data, MSMEs employ more than 80 million people.
For July exports, the government will process refund cheques by Oct 10 & for Aug exports, will process refund cheques by Oct 18.
Revenue Secretary Hasmukh Adhia however, clarified that this will roll out from October 1. Members examined the provisions and after detailed study we found that large companies/taxpayers contribute to 94-97 per cent of the taxes filed. Exporters have also been exempted from furnishing bond and bank guarantee when they clear goods for export.
IGST is applicable on interstate trade and on imports of raw materials that exporters use.
For future, every exporter to get an e-wallet for refunds. "So two million more businesses have to file in the next six days", GoM Chairman and Bihar Deputy Chief Minister Sushil Modi told reporters after chairing the GSTN meeting.
Friday's move, which comes almost 100 days after the indirect tax levy was rolled out on July 1, came in response to representions from India Inc over difficulties in filing returns and securing refunds.