Govt may propose GST refunds on capital goods purchases to exporters

Currently, under the LUT route, they need not pay tax on their export bills, but they stand to lose refunds on taxes paid on capital goods. Taxes on all other inputs get refunded

In a bid to alleviate exporters’ concerns amid an economic slowdown, the government is likely to propose changes to the goods and services tax (GST) policy to allow for the refund on taxes paid on capital goods purchases to exporters. 

Though this will need a resolution from the GST Council, the finance ministry may announce the proposal in the upcoming Union Budget, scheduled on February 1, Business Standard has learnt. This will help those businesses which prefer the Letter of Undertaking (LUT) route to export their products or services. 

Currently, under the LUT route, they need not pay tax on