Indian apparel exporters want a higher reimbursement of central and state levies to stall decline in exports as they are losing competitiveness by around 9 per cent in export markets after the rollout of goods and services tax (GST). The export promotion benefits earlier were to the tune of 11.93 per cent while the same now stands at 3 per cent.The demand follows a 39 per cent decline of apparel exports for October.For the July-October period, there has been a drastic fall of 5.94 per cent in overall exports of apparels, Apparel Export Promotion Council’s (AEPC) export promotion committee chairman Anil Buchasia told reporters recently, reports Fibre2Fashion.The decline was mainly because of sharp reductions in the effective drawbacks and rebate on state levies, he added. Under drawback, exporters get the reimbursement of duties they have paid on the imported items used in the finished goods.The drawback mechanism earlier reimbursed both the customs duties and domestic taxes like central excise and service tax. But in the GST regime, the drawback rates are now only reimbursing the customs duties, Buchasia said.AEPC has suggested an alternative mechanism for reimbursements of central and state levies and has urged the government that in addition to the GST credit, the various blocked and embedded taxes should be refunded at the earliest.
