Knitwear exporters, who have to as of now file a bulk set of export documents to claim refund/rebate on various taxes levied under Value Added Tax Act, are eagerly awaiting the announcement of Goods and Services Taxes (GST) regime.
Along with many other advantages that this policy would bring, the most awaited one according to exporters is the ‘time-bound’ disbursal of tax refunds to them through a speedy online process. Currently there is not set deadline for the disbursal of the Value Added Tax refunds. GST is also expected to ensure the benefit of input tax credit for the raw materials purchased from other states.
In GST regime, exports were proposed to be ‘zero-rated’ which means the export goods will not suffer any actual tax liability. However, according to M. Veluswamy, an apparel exporter and Chairman of Confederation of Indian Industry, Tirupur, the real benefit of the refund scheme can be obtained only when the same gets implemented by the authorities.
And for apparel exporters in the small and medium scale sector, the process of accounting and preparation of annual financial statements for individual export firms will become easier with the GST roll-out since it would integrate the refund of accumulated credit or rebate claims presently mentioned in the VAT Act.