GST refunds of apparel exporters blocked: FIEO

The Federation of Indian Export Organisations (FIEO) on Monday said that Rs 6,000 crore in duty refunds of apparel and made-ups exporters are blocked under two government schemes and that is why they are facing “acute” liquidity problem.

According to FIEO, around Rs 6,000 crore of duty refund claims have not been disbursed under the Rebate of State and Central Taxes and Levies (RoSCTL) and the Merchandise Export from India Scheme (MEIS) from March 7, 2019 and August 1, 2019, respectively.

“This is a fatal blow to the apparels and made-ups industry,” FIEO president Sharad Kumar Saraf said, adding that most of the apparel exporters are from MSME sector and some of them are already in the process of closure and default.

The exporters of these products were surprised to see a gazette notification dated January 14, 2020 by the textiles ministry announcing one-time additional ad-hoc incentive of one per cent to offset difference between MEIS and RoSCTL from March 7, 2019 to December 31, 2019, he said.

“This is completely contradictory to what was already announced by the government and factored by the industry to maintain their competitiveness amid fierce competition. Many of them have paid statutory taxes also on RoSCTL and MEIS benefits,” Saraf said, adding to make the matter worst, the directorate general of foreign trade is demanding the refund of MEIS paid between March 7, 2019 and July 31, 2019.

“This is not only unfair but also legally untenable because the policy once announced cannot be changed retrospectively,” he further said.