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GST impact: 12% rate takes a toll on seafood exporters' margins

The exporters are yet to come out with the exact loss figures after the roll-out of the GST

Nirmalya Behera  |  Bhubaneswar 

Seafood
Seafood

Margins of are likely to take a hit as the sale of 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 are granted as rewards to exporters under the Merchandise from India Scheme (MEIS), introduced in the Foreign Trade Policy 2015-20, and the Service from India Scheme (SEIS) and are adjusted against duties payable to the government. However, if exporters are unable to use the they can sell the same to as these are freely transferable.

“Earlier, the sale of under 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 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

The exporters are yet to come out with the exact loss figures after the roll-out of the

“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 Council to take up the matter in its next meeting,” said Ajay Dash, regional president (Odisha), Association of India.

Earlier, the licence value was adjusted by against the customs duty, payments of excise duties and payments of service tax. Under the GST, it will be adjusted against the basic customs duty, leading to a reduction in demand for the

“Exporters are already operating at a thin margin. Net realisation of sale of has come down to about 87 per cent, from 97 per cent earlier. The provisions are a further discouragement for exporters,” said Gorachand Mohanty, managing director cum chief executive officer of Seagold Overseas.

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