Export Promotion Schemes and GST

2019 ias preliminary exam test series

The union government has modified the oreign Trade Policy (2015-20) and other export promotion schemes according to GST regime.

Under the GST regime, no exemption from payment of Integrated GST (IGST) and compensation cess would be available for imports under Advance Authorisation. Importers would need to pay IGST and take input tax credit as applicable under GST.

However, imports under Advance Authorisation would continue to be exempted from payment of basic customs duty, additional customs duty and education cess.

Exemptions will also be provided wherever penal duties such as anti-dumping, safeguard and transition product specific safeguard duty are applicable.

The EPCG scheme (Chapter 5 of the FTP), too, importers of capital goods would need to pay IGST and take input tax credit.

Benefits under the Merchandise Export from India Scheme (MEIS) and the Services Export from India Scheme (SEIS), which provides exporters with duty free scrips based on the value of their exports, have also been curtailed.

Imports by Export Oriented Units (EOUs), which were allowed duty free imports of goods for their authorised operations, will now get exemption on only the customs duty. Such goods would attract integrated tax and compensation cess. The taxes so paid on imports will be neutralised by ITC (input tax credit).

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