Exporters facing working capital crunch due to delay in GST refund have sought the government intervention in providing bridge loans at softer rates.
“Many exporters are in the verge of closure due to draining of working capital as funds have got blocked on account of GST,” said A Sakthivel, regional chairman, the Federation of Indian Export Organisations (Fieo).
“We request urgent intervention of the finance minister to instruct the banks to provide ‘bridge loans’ at softer rates so that exporters can meet their working capital requirements,” said Sakthivel. Fieo officials also said possibility of non-performing assets shooting up in the export sector cannot be dismissed if the situation continues unabated.
According to him, GST is not being refunded as fast as it was promised. Exporters are into serious financial crisis due to liquidity crunch.
Under GST, exporters need to pay input tax while procuring raw materials and pay GST while exporting goods. The government had promised that 90 per cent of the amount claimed as a refund excluding the amount of input tax credit will be granted provisionally within 10 days of making application and within seven days of issuance of acknowledgement of the application. “We have been told the system is not ready,” said Sakthivel.
In case of input tax credit too exporters have not received refund as due date for filing returns has been extended and as per procedure the refund will be provided to the exporters after matching the returns filed by the supplier and the purchaser.
“We request the government to provide duty drawback and rebate of state levies till the system gets ready,” he added.