ComMin to align foreign trade policy with GST

The commerce ministry will come out with a notification to align the foreign trade policy (FTP) with the provisions of the Goods and Services Tax (GST), which will be rolled out from July 1.
The ministry will have to come out with a notification as it has not been able to revise the FTP as was planned earlier.
In a statement, it said that the ministry will release the reviewed FTP in September and not before the GST rollout as was being planned.
It was announced earlier that the mid-term review of FTP would be released before July 1 to align it with the rollout of Goods and Services Tax (GST).

"A number of representations have been received from exporters regarding GST. Accordingly, it has been decided to release the reviewed FTP in September. This will allow the government to factor in the exporters' feedback on relevant issues post GST," the ministry said in a statement.
The five-year foreign trade policy (2015-20) provides a framework for boosting exports of goods and services besides creation of employment and increasing value addition.

In view of the rollout of the new indirect tax regime from July 1, certain changes are expected to be made in the policy relating to incentives for exporters such as duty exemption schemes, export promotion capital goods schemes and deemed exports.

As there is no provision of ab-initio exemption in the GST, exporters would have to pay the duties and then seek refunds.
An official said the commerce ministry would come up with a trade notice tomorrow to align certain key provisions of the policy with the GST.
Without this, the FTP would be incompatible with the provisions of the GST.
Further, the government is likely to bring in an ordinance soon to amend the SEZ Act to bring it in line with the Goods and Services Tax.
Certain provisions in the special economic zone (SEZ) Act, 2005, are not consistent with the GST regime and need to be made compatible before the July 1 rollout date.