(From Representative) Ahmedabad, Friday
The 18 percent GST levied on container charges i.e. freight rates for goods sent to the international market from October 1 will destroy the competitiveness of Indian products in the international market. As a result, there has been a demand to withdraw the Goods and Services Tax levied on freight rates from October 1.
However, when the Goods and Services Tax was implemented in July 2017, there was opposition against it. But from January 2018, it was decided not to charge GST on Noordar. This offer was earlier scheduled not to be taken till 30th September 2018. Then once again that period was extended to 30th September 2022. Since the government has not given a new extension after 30th September 2022, 18 percent GST has to be paid on Noordar i.e. the charges given to the shipping companies for carrying the goods sent abroad by the shipping line.
In a letter written by Federation of All India Chamber of Commerce Chairman Krishna and spokesperson Rajeshwar Prasad Painuli to Commerce Minister Piyush Goyal on October 6, it has been stated that the exporters were expecting that the circular period of non-GST on supply would be extended. This will put additional working capital burden on them. They will face shortage of cash. Withdrawal of concession in GST on supplies will cut exporters’ margins. The condition of small and medium enterprises will become very bad. Currently, exporters are working with very thin margins. Their competitiveness in the world market will be lost. As the GST burden increases, they will also have to incur additional expenses for filing their returns. There will also be expenditure on hiring people. It will have an adverse effect on their work.
GST has been introduced on exports made by sea or on freight paid for exports made by air or air. However, there are more multinational companies in the shipping business. They are increasing the shipping freight rates outrageously. However, compared to six months ago, the charges have come down.
GST is not charged if payment is made in foreign currency
A number of agents are active in shipping companies to book containers for exporters. As bookings are made through these agents, the agents become stakeholders in the profits of the shipping company. It is because of this partnership that GST has been imposed on them. If the exporting company or the exporter pays the freight rate directly in dollar currency to the multinational company, then the GST is not applicable on the freight rate, say experts in the export sector.
