CashewInfo
News

Home   >   NEWS & VIEWS   >   News

  • Delay in GST refund hits cashew industry

    Sep 27th, 2019

    Import of raw nuts exempted from import duty but 5% GST has to be paid within two days

    Uncertainty over the refund of crores of rupees collected under the Goods and Service Tax (GST) head from cashew processors who import raw nuts with 100% export obligation of processed nuts under the Advance Authorisation Scheme (AAS) has plunged the cashew sector across the country into a crisis.Export-oriented processors say that the uncertainty has put the industry in a negative working capital situation. Import of raw nuts against AAS is exempted from import duty but GST of 5% has to be paid within two days of the consignment reaching the port of import. Following export of kernels after processing the GST amount will be refunded.

    Sale in the domestic market of kernels processed from raw nuts imported against export obligation is a violation of the AAS norms. Failure to pay the GST within two days of import attracts 18% interest on the amount from the third day.But no interest on the refundable GST amount is given to the exporter, whatever may be the delay in refund. There are about 250 cashew exporters in the country. P. Sundaran, Chairman of the Cashew Export Promotion Council of India told The Hindu that the refundable amount due to exporters range from ₹1.5 crore to even ₹5 crore per exporter.He said that the reason given for the delay from the government side was that the GST refund portal under the AAS has not been created so far. He said that while the refund has no provision for interest in case of delay, the exporters are not exempted from their interest obligation to banks for packing credit availed.Mr. Sundaran said that the situation has now hit raw nut import deals, processing and exports. Exporters are finding it difficult to pay wages for the processing that is going on and also take possession of the raw nut consignments that have reached the port of import. This in turn was creating the additional burden of demurrage, an exporter said. Refund applications filed since July are pending, he added.


    Source: http://www.thehindu.com/