The Ministry of Commerce on Friday issued a circular where the Director-General of Export Promotion (DGEP) clarified all the issues pertaining to Special Economic Zones (SEZs) and Export Oriented Units (EOUs) raised by Stakeholders during the COVID-19 lockdown.
The Department of Revenue undertook to answer both the aspects of issues that require immediate action and general policy issues.
Firstly, while answering the issue raised by the stakeholder that immediate refund of input GST to DTA suppliers of SEZ unit is pending for 6 months which ultimately has blocked their working capital, said that DGEP has asked for the list of such ITC refund not sanctioned beyond 6 months of filing so that concern field formations can be flagged for necessary action.
Secondly, while answering the other issue that extension of timelines fixed for e-way bills in view of the extra time being obtaining permission from designated nodal authorities and in view of the restrictions imposed on the movement of goods due to lockdown, said: “the request to extend timelines fixed for e-way bills has already been taken care of by CBIC with the issuance of the notification, wherein if the validity of an e-way bill generated under Rule 138 of the CGST Rules expires during the period between 20 March to 15 April the validity period of such e-way will be extended till April 30, 2020.”
Thirdly, while answering the general policy issue that GST is currently being imposed on foreign currency conversion charges to promote exports and to avoid cash flow issues for exporters, GST on foreign currency conversion charges may be reduced, said “Proposal for reducing/ eliminating GST imposed on foreign currency conversion charges has been flagged to JS (TRU-I) for examination.”
Fourthly, while answering the general policy issue that as an export promotion measure, EOUs may also be granted ab initio exemption from payment of GST, said there is no requirement of granting ab initio payment for granting GST on domestic pronounce by EOUs.
Fifthly, while answering the general policy issue that As an alternative to the refund GST, Income Tax, etc. pending disbursal from Government, commercial banks may be directed to advance loans with interest being paid by Government for such refund of GST, taxes, etc pending, said, “No basis/framework has been provided for this proposal of Government paying the interest against loan advanced by Banks in lieu of refunds of GST, Income Tax, etc. A concept paper may be provided in this regard for examination by CBIC.”To Read the full text of the Circular CLICK HERE