FTP pragmatic but key lies in faster clearance of GST refunds: EEPC

To improve ease of doing business a new scheme of self-assessment-based duty-free procurement of inputs required for exports has been introduced

Commerce and Industry Minister Suresh Prabhu let out more incentives while unveiling the mid-term review of the Foreign Trade Policy 2015-20 with a view to boosting exports.

Incentives under the Manufacturing Exports from India Scheme (MEIS) and Service Exports from India Scheme were targeted at labour-intensive sectors such as agriculture, leather, carpets and marine products and came days before the Gujarat elections, where the launch of GST and the impact on small businesses has emerged as a key issue.

The DGFT said the government will continue to interact with exporters and take measures to benefit them.

Impetus worth Rs 1,140 crore has been given to the services trade, as well as annual incentives worth Rs 2,743 crore for sub-sectors under the textiles sector.

The government announced revised incentive figure of 4,567 crores for goods exports and 1,140 crores for the exports of services.

The mid-term review of FTP, released by the ministry of commerce and industry, has given thrust on ease of doing business, ease of trading across borders, exploring new export markets, new export products, simplification of procedures and processes and establishing National Trade Facilitation Committee headed by Cabinet Secretary to boost exports.

He, however, added that the 2% increase in the MEIS rates granted in the FTP mid-term review to labour intensive sectors would provide the much-needed respite to these sectors as they were facing intense competition from other countries.

The Minister said that the Policy, announced in 2015, was not a one-time exercise for helping the exporters.

"Increasing the validity period of duty credit scrips from 18 months to 24 months besides increase in the export incentives (both for MEIS and SEIS schemes) should benefit the export sector in general", Deloitte India Senior Director R Muralidharan said. Exporters can import necessary inputs under duty-free scheme through self declaration instead of having to secure ratification from the Norms Committee that the raw materials will indeed be used in the manufacture of export items. Overall, the FTP review sends a signal about government's commitment to promote exports.

"While exporters will be happy with the direction, they would look forward to some quick and long term solution to working capital blockage with respect to input GST", Pratik Jain, Leader- Indirect Tax, PwC India, said. It also aimed at increasing India's share of world exports to 3.5 per cent, from 2 per cent. "It requires continuous monitoring of the situation on the ground and flexibility in approach, which GST council has shown in last few months".

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