NEW DELHI: A parliamentary panel has recommended several changes in the GST architecture, including exemption from tax payment on goods and services used for exports, while noting that teething troubles have resulted in a perception that implementation has not been proper despite the new tax regime being structurally better than the earlier system.
While making several observations related to the technology, the standing committee on commerce headed by Naresh Gujral has suggested the government to extend the pre-GST duty drawback rates until June next year or till the revenue department comes out with the revised rates for exporters. It said that the move will enable the exporters to overcome the problems being faced by them currently besides helping them to take a long-term view while negotiating orders.
“The committee finds that the problem of delayed refund to exporters has caused hardships… if the taxes are to be finally refunded then what is the need to put the exporters to the rigmarole of paying taxes and taking its refund or taking refund of unutilised input tax credit. It has been noted that it is easy to pay tax but it is very difficult to get refund. The committee feels that a system may be devised to ensure that the procurement/ manufacture for export purposes be exempted from taxation system,” the panel said in its report on the ‘Impact of GST on Exports’ tabled in Parliament on Tuesday.
The panel also suggested that a simplified system for filing of refunds needs to be devised which is in line with the ease of doing business.
Goods and Services Tax (GST) refund mechanism for exporters is tardy and cumbersome owing to several operational issues, it added. For instance, it pointed out that there was no interface between the technology platforms of GST Network, which operates the main technology platform for filing of returns and payment of tax, and those of customs and the Directorate General of Foreign Trade. It then went on to say that GSTN did not get enough time for testing.
The panel was also critical of the lack of clarity among officers at the ground level on aspects such as letter of undertaking and noted that even training given to officers on ground on issues was inadequate.