Page 43 - Chemexcil NEWS August - September 2017 for web

20. TRADE POLICY REVIEW ONLY AFTER RESOLVING EXPORTERS’
CASH WOES, SAYS MINISTRY

NEW DELHI, SEPTEMBER 3: account is again re-credited.The other option of an
actual wallet is similar to the e-wallet concept, but
The Commerce Ministry will come up with the the virtual money is replaced by actual money to
mid-term review of the foreign trade policy be provided by the Centre. In the actual account,
(FTP), initially scheduled this month, only after too, no money would go out and accounts would
resolving the liquidity issues faced by exporters only be debited and credited based on GST paid
under the Goods and ServicesTax (GST) regime, a and reimbursements made.
government official has said.
“Although the Centre is more comfortable with
“Two options are being examined by the Centre the actual wallet proposal as it involves real
to deal with cash shortage faced by exporters who money, the Finance Ministry may have to provide
are no longer entitled to tax exemptions under `30,000-40,000 crore quarterly for it which it may
various incentive schemes and have to instead not be comfortable with,” the official said.
pay taxes upfront and later claim reimbursement.
Without a resolution to the issue, there is no point (Source:- http://www.thehindubusinessline.com/economy/
coming out with a mid-term review,” the official policy/trade-policy-review-only-after-resolving-exporters-
told BusinessLine. cash-woes-says-ministry/article9844588.ece dated 3rd
September-2017)
One option is the much debated introduction of
e-wallet facility for exporters for virtual payment of
taxes while the other is putting in place an actual
wallet for use by exporters with money deposited
by the Centre.

The Finance Commerce Ministries will thrash out
both options and examine others too, if required,
to reach an understanding, before sorting the out
the matter with the GST Council.

According to estimates made by the exporting
community, over `1.85 lakh crore of their working
capital may get stuck annually because of the
time-lag between paying taxes and then getting
refunds instead of exemptions.

e-wallet facility

In the previous round of consultations before the
GST was implemented on July 1, the Commerce
Ministry had proposed that an e-wallet facility
could be introduced for exporters.

Under the mechanism, the e-wallet account of an
exporter is debited based on the preceding year’s
exports.

Whenever the exporter is supposed to pay GST,
whether for imports or for procurement by
merchant exporters, the payment is made from
the e-wallet. Money, however, does not go out of
the e-wallet account at all. It just goes from the
GST account of exporter to the GST account of
the supplier. The value of the e-wallet remains the
same.When the exporter gives proof of export, her

41 August-September-2017