The withdrawal of GST exemption on overseas freight has been a cause of concern for exporters in India. Previously, the government had exempted the GST on freight charges for goods that were exported. This exemption was given to ensure that Indian goods remained competitive in the global market.
However, the government withdrew this exemption in 2018, stating that it would help boost the domestic shipping industry. The withdrawal of this exemption has led to an increase in the cost of exports, as exporters now have to bear the GST on the freight charges. This has added to the pains of exporters, who are already grappling with issues like delayed refunds and high compliance costs.
Exporters argue that the withdrawal of the exemption on overseas freight has made Indian goods less competitive in the global market, as the cost of exports has gone up. This, in turn, has led to a decline in export volumes, which has adversely affected the Indian economy.
To address this issue, exporters have been demanding the restoration of the GST exemption on overseas freight. They argue that this exemption would help boost exports and make Indian goods more competitive in the global market. The government, on the other hand, has stated that the withdrawal of the exemption is aimed at promoting the domestic shipping industry and boosting the 'Make in India' campaign.
In conclusion, the withdrawal of the GST exemption on overseas freight has added to the pains of exporters in India. The restoration of this exemption could help boost exports and make Indian goods more competitive in the global market. The government will need to strike a balance between promoting the domestic shipping industry and supporting the export sector to ensure a healthy and sustainable growth of the Indian economy.
The withdrawal of the GST exemption on overseas freight has had a significant impact on exporters in India. Prior to the withdrawal of the exemption, exporters were not required to pay GST on the freight charges for goods that were exported. This exemption made Indian goods more competitive in the global market by reducing the cost of exports for Indian exporters.
However, with the withdrawal of the exemption, exporters are now required to pay GST on the freight charges for goods that are exported. This has increased the cost of exports for Indian exporters, making Indian goods less competitive in the global market. The increase in costs has led to a decline in export volumes, impacting the revenues of Indian exporters.
In addition to the increased cost of exports, the withdrawal of the exemption has also led to increased compliance costs for exporters, as they now have to comply with the GST rules for overseas freight. This has added to the burden of Indian exporters, who are already grappling with high compliance costs and delayed refunds.
Overall, the withdrawal of the GST exemption on overseas freight has been a significant blow to the export sector in India. Exporters are now calling for the restoration of the exemption, stating that this would help boost exports and make Indian goods more competitive in the global market. However, the government has not yet given any indication of restoring the exemption, stating that it is aimed at promoting the domestic shipping industry and boosting the 'Make in India' campaign.
Here are some frequently asked questions (FAQs) regarding the withdrawal of GST exemption on overseas freight:
A: The GST exemption on overseas freight was a benefit given to exporters in India, which exempted them from paying GST on the freight charges for goods that were exported. This exemption was aimed at making Indian goods more competitive in the global market.
A: The exemption on overseas freight was withdrawn in 2018 by the government of India.
A: The government withdrew the exemption to promote the domestic shipping industry and boost the 'Make in India' campaign.
A: The withdrawal of the exemption has led to an increase in the cost of exports for Indian exporters, as they now have to bear the GST on the freight charges. This has made Indian goods less competitive in the global market, leading to a decline in export volumes.
A: Exporters have been demanding the restoration of the GST exemption on overseas freight, stating that this would help boost exports and make Indian goods more competitive in the global market.
A: The government has stated that the withdrawal of the exemption is aimed at promoting the domestic shipping industry and boosting the 'Make in India' campaign. It has not yet given any indication of restoring the exemption.
A: To address the concerns of exporters, the government may consider restoring the exemption on overseas freight, or providing alternative measures to support the export sector. Additionally, efforts can be made to streamline the refund process for exporters and reduce compliance costs.
A: Apart from the withdrawal of the GST exemption on overseas freight, exporters in India are also facing issues such as delayed refunds, high compliance costs, and a lack of credit facilities. Additionally, the COVID-19 pandemic has had a significant impact on the export sector, leading to disruptions in supply chains and a decline in demand from overseas markets.
A: The government can provide support to exporters during the COVID-19 pandemic by providing relief measures such as interest rate subsidies, export credit guarantees, and export promotion schemes. Additionally, efforts can be made to streamline the export process and reduce compliance costs.
A: To remain competitive in the global market, exporters can focus on improving their efficiency and reducing their costs. This can be achieved by adopting new technologies, improving logistics and supply chain management, and diversifying their export markets. Additionally, exporters can take advantage of various export promotion schemes and incentives offered by the government.
A: The government of India offers various export promotion schemes such as the Merchandise Exports from India Scheme (MEIS), the Service Exports from India Scheme (SEIS), and the Export Promotion Capital Goods (EPCG) scheme. These schemes provide various benefits such as duty credits, exemption from customs duty, and access to credit facilities.
A: Exporters in India can access credit facilities through various channels such as banks, export credit agencies, and the Export-Import Bank of India (EXIM Bank). Additionally, the government of India has launched various schemes such as the Interest Equalization Scheme for pre and post-shipment rupee export credit, which provides interest rate subsidies to exporters.
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