The Weekend Leader - In rare face-off, exporters' body takes on FinMin for delay in e-wallet scheme

In rare face-off, exporters' body takes on FinMin for delay in e-wallet scheme

New Delhi


In a rare confrontation with the government, industry body Federation of Indian Export Organisations (FIEO) said on Monday that the e-wallet scheme aimed at easing liquidity problem in the wake of GST roll-out in 2017 has not been operationalised yet, while terming it unfortunate.

"Unfortunately, the scheme of e-wallet, which was recommended by the GST Council as early as October 6, 2017, which was expected to be put into operation in April 2018 and then deferred to October 2018, has not yet been rolled out," FIEO President Sharad Kumar Saraf said in a statement.

"The scheme may have helped in easing the liquidity problem of exporters," he added.

The e-wallet scheme is basically the creation of electronic e-wallets, which would be credited with notional or virtual currency by the Directorate General of Foreign Trade (DGFT). This notional or virtual currency would be used by the exporters to make GST/IGST payment on goods imported by them so their funds are not blocked.

Saraf, however, admitted that GST has imparted much needed competitiveness to exports.

The statement came in response to reports which, FIEO said, singled out exporters for GST fraud. It noted that painting all exporters with the same brush was unfair and damaging.

The report quoting unnamed Finance Ministry officials said that some of the "star" export houses had fraudulently claimed IGST refunds. The reports said that there were instances where an exporter with over Rs 50 crore exports of readymade garments had taken refund of Rs 3.90 crore while the entity's total GST payment in cash was merely Rs 1,650.

In another case, it was claimed that tax payments in cash had been found as Rs 51,201 while the exporter had obtained refund of Rs 9.59 crore.

The Finance Ministry official also claimed that nine star exporters were not traceable at their addresses. In two cases, the premises were found sealed and seized by the banks as the exporters had been declared as non-performing assets (NPAs).

Reacting to this, the FIEO chief said that exporters have import export code number based on PAN and bank accounts. Further, they have obtained GST registration through KYC cross verifying their email and mobile number.

"The (star) status holders have submitted the CA certificate certifying the specified exports while claiming the coveted status. Due diligence has been done by all the authorities issuing such documents. If an exporter is not found at his registered address, the possibility is that he would have changed his place of business and records may not have been updated," Saraf said.

In what appears a point-by-point rebuttal, FIEO said that there are many instances where actual payment of GST to government is very low as compared to IGST refund since while few goods are subject low GST, many services used by exporters have high GST.

"Therefore, if a merchant exporter has taken goods at 5% and services at 18%, he has sufficient ITC at his credit to pay for 5% IGST at the time of exports. He may not either pay IGST in cash or pay only a fraction of that while claiming complete refund of IGST," it said.IANS 

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