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Nirmala Seeks GST Relief for Export Sectors

New Delhi: The commerce and industry ministry has sought tax concessions for leather, plantation and service export sectors like tourism, hospitality and health besides products moving between special economic zones in the proposed goods and services tax.

Commerce minister Nirmala Sitharaman on Tuesday said her ministry has also requested the finance ministry to keep out of the GST ambit the imports of capital goods which are used as input for exports.

This includes import of raw material under the Advance Authorisation scheme and import of capital goods under Export Promotion Capital Goods authorisation scheme. The request is for an outright initial exemption for exporters rather than paying taxes first and seeking refund later as refunds take 6 to 8 months.

“We asked for leather goods to be taxed at less than 5%...a lower tax on cement which currently faces levy of upto 30% in some cases,” Sitharaman said after meeting the GST Council on Tuesday.

Though the cement sector is marred by environmental concerns and excess capacity issues, she said a lower tax rate is important looking at the country’s infrastructural needs and the government’s housing for all initiative.

The commerce department has pitched to keep plantations like coffee out of the realm of the indirect tax or be taxed at a very low rate because “these are net foreign exchange earners which need to be given support.”

Sitharaman said her ministry had also sought lowering of the import duty on gold from the finance ministry in the forthcoming Union Budget.


The minister also said the government will review the progress of the outcome of the 2015 Nairobi ministerial of the World Trade Organisation (WTO) by the middle of this month. “There will be post-Nairobi discussions-

…We will discuss our paper on trade facilitation in services, special safeguard mechanism and other issues,” Sitharaman said.

The review is important because developed countries have begun making a case for new issues like e-commerce and fisheries subsidies to be discussed in the WTO while India has vehemently opposed those. The Nairobi declaration had made an opening for these subject to the consensus of all members.

The review is being done as India doesn’t want a situation where there is no progress on the issues it finds important before the next ministerial in Argentina in December.

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