The Ministry of Commerce and Industry Ministry on Tuesday released the mid-term review of the Foreign Trade Policy (FTP) 2015-20, with focus laid on improving the situation of the export and import sector, thereby paving way for increase in job creation.
To this regard, it was reported that export-related reforms under the ambit of Goods and Services Tax (GST) were incorporated in the FTP. Also, merchant exporters have been permitted to pay nominal GST of 0.1 percent for procuring goods from domestic suppliers for export.
The report released today states focuses on exploring new markets and products, leveraging the benefits of the GST, enhancing ease of trading across borders, and increasing farmers' income through a focused policy for agricultural exports.
However, its main consensus remains promoting exports by the MSME and labour intensive sectors to increase employment opportunities.
The panel has also facilitated an increase of two percent in incentives for Merchandise Exports from India Scheme (MEIS) for two sub-sectors of textiles- readymade garments and make ups. Service Exports from India Scheme (SEIS) incentives have been increased by two percent for notified services such as business, legal, accounting, architectural, engineering, educational, hospital, hotels, and restaurants.
This, according to Finance Secretary Hasmukh Adhia, will lead to an increase in export revenue.
"With the two percent increase being given to export, there will be a boost in revenue. The benefits of GST to exporters have been incorporated, and this will be a game-changer. GST will lead to reduction in tax evasion, and will contribute significantly to the Make in India initiative," he said while releasing the report at a media briefing.
Further, GST rate for the transfer or sale of scrips has been reduced to zero from an earlier rate of 12 percent, the report stated.
Under the FTP, the value of new incentives is Rs. 8,000 crore. Incentives for goods exports is Rs. 4,567 crore, and for services exports is Rs. 1,140 crore., apart from recently announced incentives to ready-made garments. It was also noted that duty-free imports warrant a self-certification scheme.
The incentives also include Rs. 749 crore for leather and footwear, Rs. 1354 crore for agriculture and related items, Rs. 759 crore for marine exports, Rs. 369 crore for telecom and electronic items, Rs. 921 crore for handmade carpets, Rs. 193 crore for medical and surgical equipment, Rs. 1140 crore for textiles and readymade garments.
Earlier this year, Finance Minister Arun Jaitley post the 22nd meeting of the GST Council had said in order to assist export compete globally, a secretary committee was set up where Central and State officials were present and whose recommendation was considered. This thing came forward that the exporter credit is blocked, due to which cash liquidity is affected, the data of which is technically available.
He further said the immediate refund system is being worked upon and will take some time. It was decided that from October 10, July's and from October 18, August's refund would be processed and would be given to exporters through cheques.
For the unversed, the five-year FTP was announced on April 1, 25, and had envisioned India's goods and services exports to reach USD 900 billion by 2020. It also aimed at increasing India's share of world exports to 3.5 per cent.
While the report released today was scheduled to be released earlier in the year, the release was postponed in order to accommodate the proposals and concerns put forth by the exporters segment post the rollout of the GST.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)