Raja M Shanmugam, President of TEA said the notification exempting from payment of IGST while importing machinery under EPCG scheme is valid till September 30, 2018 only and, in case, if it is not extended, exporting units would have to pay IGST upfront which is an additional burden to the units. He also mentioned that the concern is the upfront payment of IGST which will affect the working capital of the exporting units as the GST refund through ITC refund route will take some time to receive. He noted that as more than 80 per cent of the exporting units are MSMEs, they cannot meet their financial requirements and this ultimately affects their day-to-day operations.

As the exporting units cannot get IGST refund if they don’t have domestic sales is a major issue for them, about 95 per cent of the exporting units does not have any domestic sales. A continued modernization is needed for the garment exporting units as the buyers are insisting for consistent quality and moreover insisting the units to install latest state-of-art technology machinery.

Raja M Shanmugam said he has sent the requisition letters to Suresh Prabhu, Hon’ble Union Minister of Commerce & Industry, Ministry of Commerce & Industry, Dr. Anup Wadhawan, Secretary, Department of Commerce, Alok Vardhan Chaturvedi, DGFT and PMO Office requesting to extend the IGST payment exemption on urgent basis.