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GST impact: 12% rate takes a toll on seafood
exporters' margins
BHUBANESWAR: Margins of seafood exporters are likely
to take a hit as the sale of duty credit scrips will now
attract a hefty 12 per cent goods and services tax (GST)
compared with a four per cent VAT (value added tax) or a
two per cent CST (central sales tax) levied earlier.
The duty credit scrips are
granted as rewards to exporters under the Merchandise
Exports from India Scheme (MEIS), introduced in the
Foreign Trade Policy 2015-20, and the Service Exports
from India Scheme (SEIS) and are adjusted against duties
payable to the government. However, if exporters are
unable to use the scrips they can sell the same to
importers as these are freely transferable.
“Earlier, the sale of
scrips under MEIS used to attract a four per cent VAT or
two per cent CST. Now, the sale of incentives given on
free-on-board (FOB) value of exports in the form of
licence would attract a 12 per cent GST,” an official of
a large exporting company said, adding it is a big blow
for seafood exporters.
The exporters are yet to
come out with the exact loss figures after the roll-out
of the GST.
“The exporting industry
associations are facing a lot of problems and have
written to the commerce ministry for a continuation of
the existing pattern. The ministry is believed to have
written to the GST Council to take up the matter in its
next meeting,” said Ajay Dash, regional president (Odisha),
Seafood Exporters Association of India. |