The Tirupur Exporters’ Association (TEA) has urged the government to extend the Integrated Goods And Services Tax (IGST) exemption period for import of capital goods under Export Promotion Capital Goods (EPCG) scheme beyond March 31, 2019, for another two years. The association also wants the exemption for import of inputs under Advance Authorisation scheme.
TEA president Raja M Shanmugham has written to the Union commerce ministry stating post GST rollout, the association had sought the exemption from the payment of IGST. Considering the needs of the sector, the Centre had been extending the exemption term, phase-wise for a period of six months on each occasion, since 1 July 2017. The current phase ends on 31 March 2019.
He wrote that the continuous modernization/expansion is taking place in Tirupur, comprising the sector having more than 80 per cent in MSMEs to enhance the quality for fulfilling the buyers requirements and also increase the productivity. At this juncture, the exporting and job working units are having doubt on continuation of IGST exemption beyond 31 March 2019 and the major concern is that the IGST paid for Capital Goods could not get adjusted or refunded.
Due to this, the units are in a dilemma whether to place the order with machinery suppliers by presuming that the exemption would continue beyond 31 March 2019 or else to wait for the clarification from the government side.
He has mentioned that once if the election code of conduct is announced, probably in the second week of March and in case, if the IGST Payment exemption notification has not been issued, then it would be a big setback for the units, particularly MSMEs going for modernization.
He has further urged the Minister to help for extension of exemption for another two years till the industry bounce back on urgent basis.
Source: https://in.apparelresources.com