GST regime more primitive than VAT: Amit Mitra

The hurried launch of GST without proper infrastructure in place has made the indirect tax system more "primitive" than the VAT regime, West Bengal Finance Minister Amit Mitra said.

The Centre, he said, is using ledger for manual record of refunds due to lack of interface between the GST network and customs electronic date interchange (EDI) as well as the Directorate General of Foreign Trade (DGFT).

This was one reason why he had asked the Centre to push back the date of GST launch, the minister said.

Even in the VAT system, there was no manual intervention in the entire process of filing of returns, Mitra said while addressing an award ceremony organised by Federation of Indian Export Organisation here last evening.

Citing a parliamentary committee report, the minister said owing to the GST system, exporters were unable to get refunds and at least 10-15 per cent of their working capital was locked.

The committee noted that a sharp liquidity crunch has gripped majority of exporters due to blocking of funds, Mitra said.

"The delay in disbursing refunds means your capital is blocked. The committees report said the (quantum of) blocked capital (stuck up with the government for refunds) could be between 15-20 per cent of the working capital. Declining of the working capital would lead to losing of jobs by the workers," Mitra pointed.

"There are job losses due to less business in gems and jewellery sector, I am also deeply concerned about SME and unorganised sectors which are cash-based," Mitra said.

Despite GST-related hurdles, Mitra was optimistic about the overall growth of exports from West Bengal.

In 2016-17, export from the state was worth Rs 53,649 crore and it is expected to touch Rs 75,000-80,000 crore in 2019-20, Mitra said.

Some 10 items account for almost two-thirds of the total exports from the state with jewellery, fishery and leather among the majors.