Lok Sabha Question No. 6495 (UNSTARRED), answered on 2018-04-06
Subject: Decline in Exports Post GST
Ministry: FINANCE
Asked by: RAKESH SINGH

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA UNSTARRED QUESTION NO. 6495 TO BE ANSWERED ON FRIDAY, 6 th  April, 2018

## DECLINE IN EXPORTS POST GST

6495. SHRI RAKESH SINGH: Will the Minister of FINANCE be pleased to state:
2. (a) whether there has been a decline in exports from the country since the introduction of Goods and Services Tax (GST);
3. (b) if so, the details thereof, Statewise;
4. (c) whether any steps have been taken by the Government to resolve the problems of companies involved in exports; and
5. (d) if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI SHIV PRATAP SHUKLA)

(a) & (b)      No, there has been no decline in overall exports from the country since the introduction of Goods  and  Service  Tax  (GST).    Export  data  post-GST  given  below  shows  that  monthly  exports  are consistently higher than corresponding period of previous year except in October,2017 for merchandise export and September,2017 for services export. Post-GST (July 2017 - January 2018) the growth rate of India's export is 11.3% compared to the same period of previous year:

- (c) & (d)

CHAITRA 16, 1940 (SAKA)

## Monthly Exports post-GST (US$ Billion)

|           | Merchandise Export   | Merchandise Export   | Merchandise Export   | Services Export   | Services Export   | Services Export   | Overall Export   | Overall Export   | Overall Export   |
|-----------|----------------------|----------------------|----------------------|-------------------|-------------------|-------------------|------------------|------------------|------------------|
| Months    | 2016- 17             | 2017- 18             | % chg                | 2016- 17          | 2017- 18          | % chg             | 2016- 17         | 2017- 18         | % chg            |
| July      | 21.69                | 22.35                | 3.0                  | 12.78             | 13.18             | 3.2               | 34.47            | 35.53            | 3.1              |
| August    | 21.60                | 23.52                | 8.9                  | 13.38             | 13.70             | 2.4               | 34.98            | 37.22            | 6.4              |
| September | 22.77                | 28.73                | 26.2                 | 13.77             | 13.73             | -0.3              | 36.54            | 42.46            | 16.2             |
| October   | 23.36                | 22.82                | -2.3                 | 13.11             | 14.15             | 7.9               | 36.47            | 36.97            | 1.4              |
| November  | 20.07                | 25.92                | 29.2                 | 13.34             | 15.39             | 15.4              | 33.40            | 41.32            | 23.7             |
| December  | 24.06                | 27.07                | 12.5                 | 13.80             | 16.01             | 15.9              | 37.86            | 43.07            | 13.8             |
| January   | 22.36                | 24.96                | 11.6                 | 13.57             | 16.34             | 20.4              | 35.93            | 41.30            | 14.9             |
| Total     | 155.90               | 175.36               | 12.5                 | 93.75             | 102.50            | 9.3               | 249.65           | 277.86           | 11.3             |

Implementation of Goods and Services Tax has been widely welcomed by the trade and industry. Though there  have  been  some  initial  problems  in  implementation,  Government  has  been  very  responsive  in addressing  those  in  time.  Following  decisions  have  been  taken  by  the  Government  to  resolve  the problems of companies involved in exports :

-  The  facility  of  furnishing  Letter  of  Undertaking,  in  place  of  a  bond,  for  exporting  goods  or services or both was made available to all exporters except those who have been prosecuted for any offence under the CGST Act, 2017, or the IGST Act, 2017, or any of the existing laws and the amount of tax evaded in such cases exceeds two hundred and fifty lakh rupees.
-  Holders of Advance Authorization / EPCG and EOUs would not have to pay Integrated Tax and Compensation Cess on imports. Further, domestic supplies to holders of Advance Authorization / EPCG and EOUs would be treated as deemed exports under Section 147 of CGST/SGST Act and refund of tax paid on such supplies would be given to the supplier or recipient.
-  Merchant exporters were allowed to pay nominal integrated tax of 0.1% on inter-State supply of goods received or 0.05% of central tax and 0.05% of state tax on intra-State supply of goods received from domestic suppliers for exports.
-  Specified  banks  and  Public  Sector  Units  (PSUs)  are  being  allowed  to  import  Gold  without payment of integrated tax. This can then be supplied to exporters as per a scheme similar to Advance Authorization.
-  The relief package for exporters in October 2017 included exemption of IGST for sourcing inputs both on import as well as domestic supplies under Advance Authorization Scheme, Export Promotion Capital Goods Scheme and 100% Export Oriented Unit Scheme. The 26th Meeting of the GST Council on 10.03.2018 has decided to further extend the IGST exemptions till 1.10.2018 on the above schemes. Exports  have  been  allowed  on  furnishing  of  Legal  Undertaking  (LUT)  without  the  requirement  of Bond/bank guarantee.
-  MEIS (Merchandise  Exports  from  India  Scheme)  was  increased  by  2%  to  MSMEs  /  labour intensive  industries  involving  an  additional  outlay  of  Rs.7310  crore  that  includes  Rs.  2743  crore incentives for two sub-sectors of Textiles i.e. readymade garments and made-ups on which MEIS was raised  from  2%  to  4%.  Similarly,  the  SEIS  (Service  Export  from  India  Scheme)  incentive  rate  was increased  by  2%  for  all  notified  services  such  as  Business,  Legal,  Accounting,  Architectural, Engineering, Educational, Hospital, Hotels and Restaurants amounting to Rs. 1140 crore. The validity period of the Duty Credit Scrips was increased from 18 months to 24 months to enhance their utility in the  GST framework. Further, GST on sale of Duty Credit Scrips (which are basically incentives on exports) has been reduced to Zero from the earlier rate of 12%.
-  GST on job work in textiles  sector,  diamond  processing  in  Jewellery  sector  and  leather  and footwear sectors has been brought down to 5%. The Government has also taken measures and issued instructions to expeditiously disburse the refund of IGST paid on goods exported. Besides, GST council is meeting at regular intervals to address concerns of industry regarding various issues related to GST including rationalisation of GST rates, simplification in filing of GST returns, expediting the process of refunds of Integrated GST and Input Tax Credit for exporters.

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