GST framework is impacting engineering companies’ exports: Engineering Export Promotion Council

Mumbai: The current regulations under Goods and Services Tax (GST) framework and how that’s interpreted is causing several problems for some of the engineering companies,
Engineering Export Promotion Council (
EEPC) said.

EEPC has reached out to the government and asked it to iron out these issues.

The exporters had pointed out issues with the rule 96 (10) of the GST framework that is around taxation of goods and services meant for exports.

Under this rule, exporters are barred from making transactions in specific manner, for availing of the GST refunds under the IGST regime, EEPC said.

”But the same is causing great hardship. More importantly, this provision is causing hindrance to the promotion of exports which cannot be the policy of our Government. Flexibility in the hands of exporters cannot be taken away on account of procedural issues,” said Mahesh Desai, chairman EEPC said.

The council also said that while the recently announced Production Linked Incentive (PLI) scheme is a good initiative for Atmanirbhar Bharat, a separate PLI scheme should be announced for the MSME sector with focus on technology upgradation.

The council has made the presentations to the commerce and industry minister Piyush Goyal.

In other submissions before the BoT, the EEPC India Chairman said the Remission of Duties and Taxes and Exported Products (RoDTEP) rate should be announced at the earliest so that it is possible for exporters to factor in the benefits from January 01, 2021. RodTep of minimum 3% should be given to all engineering products made from iron & steel so that, as and when higher rates are announced they can have higher RodTep. Incidence of duties and taxes is much higher at 7% and above.

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