Exports Current Affairs

Government constitutes GoM to resolve IT challenges faced in GST implementation

Union Finance Ministry has constituted Group of Ministers (GoM) to monitor and resolve IT challenges faced in implementation of Goods and Services Tax (GST). It also Committee on Exports to look into issues of exports.

Both committees were constituted following the decision taken in 21st GST Council meeting in Hyderabad, Telangana.

Key Facts

Group of Ministers (GoM): It will be headed by Bihar Deputy Chief Minister Sushil Kumar Modi. It will be assisted in its work by Chairman, Goods and Services Tax Network (GSTN) and Chief Executive Officer, GSTN. It was formed after states had raised issue of glitches being faced by taxpayers in filing their GST returns on GSTN.

Committee on Exports: Its mandate is to look into issues of exports and recommend GST Council suitable strategy for helping the sector in the post-GST scenario. It will be headed by Revenue Secretary Hasmukh Adhia.

Background

Exporters raised concern related higher cost of working capital owing to difficulties in availing input tax credit and refunds after implementation of GST regime. Before GST, exporters enjoyed upfront tax exemption on goods to be exported, but now, they have to pay GST before procurement of goods and services.

Moreover, exporters also need to pay IGST on imported inputs. However, they can avail input tax credit after sale within domestic tariff area or after sending their shipments outside country. The exporters can then claim unutilised credit as refund, process in which their capital gets blocked with government and resulting in raising of their operating cost.

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NITI Aayog constitutes Expert Task Force on Employment and Exports

The National Institution for Transforming India (NITI) Aayog has constituted Expert Task Force to provide major thrust to job creation by enhancing India’s exports. It will be headed by NITI Aayog Vice Chairman Dr Rajiv Kumar.

The task force will give sector-specific recommendations in key employment sectors for policy interventions and suggest measures to enhance trade in services with high employment potential.

Background

Majority of Indian workforce are still employed in low-productivity, low-wage jobs in small, micro and own-account enterprises. There is urgent and sustained expansion of organized sector to address India’s unemployment and under-employment issue also jobless growth issue. Moreover considering importance of exports in generating formal sector jobs, India also needs to create favorable environment in which globally competitive exporters emerge and flourish. So, it has become necessary to devise strategy to enable shift towards more labour-intensive goods and services that are destined for exports.

Terms of References

The expert task force will propose comprehensive plan of action to generate employment and alleviate under-employment and low wages by boosting India’s exports in key labour-intensive industries. It will recommend sector-specific policy interventions in key employment sectors and suggest measures to enhance trade in services with high employment potential

It will identify key macroeconomic factors constraining exports and suggesting methods to address these constraints. It will assess effectiveness of existing schemes to promote exports. It will also suggest measures to address issues related to logistics, export credits and trade facilitation.

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