The faster growing economy of the nation is attributable to the numerous efforts made by the Government in facilitating trade in the country. Introduction of the policies such as "Startup India", "Standup India" and "Skill India" have focussed on supporting the growth and development of the commercial sector of the nation. Aiming at increasing the domestic production levels benefiting the Indian economy, offering employment opportunities to the working cadre and liberalization of the investment policies, the Government has been devising schemes for benefiting the corporates to house their businesses in the country.
The Export Business
Conducting business across the borders has always been a profitable source of elevating the income sources. The export of goods and services from India to foreign nations since ancient times has fetched good repute and revenue. India has a comprehensive institutional set up to promote international trade. The Government has encouraged the export business of the Indian entities by bringing out regulations and policies benefiting such exporters. A number of products are exported from India which include jute, tea, cotton, spices, engineering goods, refined petroleum, gems, jewellery, chemicals, agricultural products, textiles, etc.
The Foreign Trade Policy (2015-2020) of the country has the objective of developing export potential, improving export performance and foreign trade and creating favorable balance of payments position. It also aims to help diversification of India's export by aiding various sectors of the economy to gain global competitiveness with a view to foster exports.
The prevalent tax refund mechanism has been taking a toll on the exporters in India covered under the provisions of the Goods and Services tax (hereinafter referred to as "GST"), some of which are listed below:
- Delay in refund under GST impacts business and raises working capital cost;
- State tax authorities lacking familiarity with some export schemes;
- Technicals hurdles owing to minor issues such as ambiguity with respect to the jurisdiction of the officers;
- Input tax credit mechanism still requires streamlining.
The Government may soon propose solutions to the challenges confronted by the exporters in the nation by simplifying the process of refund of tax to them.1 The Government is expected to provide a reconciliation mechanism for exporters to understand against which claims they have received the refund amount for integrated GST rebate claim. Procedural relaxations shall make refunds seamless and easier and thereby facilitating carrying out the business activities by the businesspersons.
1 https://economictimes.indiatimes.com/news/economy/policy/easier-tax-refund-regime-for-exporters-in-theworks/ articleshow/65891926.cms
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