Cumbersome process
Kapoor, during an interactive session organised by the Bharat Chamber of Commerce, pointed out that exports shall be treated as ‘zero rated’ supply and hence there will be refund of input tax credit.
But, the refund requires submission of at least 37 returns annually; it will be a cumbersome process that will lead to blockage of funds and impact working capital flows.
Similarly, he maintained that the silk industry and sometimes the job workers are required to buy accessories like specific threads and miscellaneous items for value addition.
Job loss feared
“Considering the numerous and small transactions, it will not be possible to claim refund of GST by the job workers and small exporters. The association, therefore, suggests that there should be appropriate mechanism for neutralising the GST paid on the accessories,” he added.
According to Kapoor, if the Model GST law is enacted as proposed, then, the fear is a large number of silk manufacturers and exporters in the MSME sector will have to close down.
This will lead to unemployment of skilled workers, especially in the rural areas.
Source: The Hindu Business Line