The government’s decision to remove the GST exemption on export freight at the beginning of the month has made exporters worried since they expect liquidity to fall at a time when they are coping with sluggish demand in advanced countries, pushing them to seek a rethink.
From October 1, 5% GST will be levied on ocean freight, while 18% GST will be levied on air exports to Indian clients.
While officials stated that there was no need to extend the benefit because the return process had gotten simpler, exporters claimed that it may take up to three months, if not longer, to receive the money.
The procedure is not complete until the returns are filed, and the deadline for filing is the 20th of each month for transactions that occurred in the previous month.
Exporters said there was a need for additional liquidity as interest rates rose and payment cycles from overseas buyers lengthened. “Recessionary tendencies have resulted in stiff competition from other countries in the international market… International purchasers have already begun postponing accepting orders.”
As a result, the cost of storing export consignments in India is rising,” said Naren Goenka, chairman of the Apparel Export Promotion Council.
