Ubharte Sitaare Fund: Rs 250-crore export-oriented fund for MSMEs launched

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The initiative would play a catalytic role in contributing to the growth of the identified companies and would also have downstream benefits such as growth and diversification of India’s exports, impetus to brand India, and employment generation.

Union finance minister Nirmala Sitharaman on Saturday launched the Ubharte Sitaare Fund (USF) for export-oriented small and mid-sized companies and startups in Lucknow. Sitharaman had announced the fund in her Budget speech in 2020 in the backdrop of constraints faced by small and mid-sized companies in realising their export ambitions, stating that micro, small and medium enterprises (MSMEs) were important to keep the “wheels of the economy moving”.

The fund, jointly sponsored by Exim Bank and SIDBI, has a size of Rs 250 crore with a green shoe option of Rs 250 crore. The fund will invest by way of equity, and equity-like products, in export-oriented units, both in the manufacturing and services sectors.

Stating that the ambitious programme was to support the champion sectors, she said some developed countries like Germany have already tried this by identifying, supporting and hand-holding the champion sectors and giving them necessary technology and fund infusion. Ubharte Sitaare largely follows the same principal, she said, adding that induction of tech will itself bring a big difference to the small and medium units.

“A project that was tailormade for MSMEs to identify champions among them and also support them now also gets the additional benefit of UP’s one-district-one-product (OPOD) programme. UP has already completed the identification process of every product in every district, and also the champions in the state. So UP justifies the launch of Ubharte Sitaare programme,” she said, adding that this will help Sidbi to extend the credit and technology facility and boost capacity to go to the market to raise funds.

The FM highlighted the efforts taken by the government to provide a boost to the MSME sector in the country, including the launch of the production-linked incentive scheme and noted that the USF would make investments in export-oriented small and mid-sized companies by way of equity and equity-like products, and thereby help script a new paradigm of growth in exports. The initiative would play a catalytic role in contributing to the growth of the identified companies and would also have downstream benefits such as growth and diversification of India’s exports, impetus to brand India, and employment generation.

Harsha Bangari, deputy managing director, India Exim Bank, said India Exim Bank has developed a robust pipeline of over 100 potential proposals and supported several companies across a diverse range of sectors. SIDBI chairman & managing director Sivasubramanian Ramann highlighted several initiatives that have been taken in the recent past for the benefit of MSMEs in the country, more so in the state of Uttar Pradesh. Meanwhile, in another event, Punjab National Bank MD & CEO SS Mallikarjuna Rao handed over a loan sanction letter of Rs 5,100 crore for implementation of the Ganga Expressway project to the Uttar Pradesh Expressways Industrial Development Authority (UPEIDA).

The 594 km-long, eight-lane expressway project from Meerut to Prayagraj will cost nearly Rs 36,000 crore and will pass through 12 districts in UP. The amount of Rs 5,100 crore, under the securitisation process will be repaid to the bank within a period of 15 years from the toll to be received on the Agra-Lucknow Expressway. During this period of loan repayment, the expressway would continue to be owned and operated by UPEIDA.

Source: Financial Express

GSTN updates facility to claim Refund of ‘Excess Payment of Tax’

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The Goods and Services Tax Network (GSTN) has updated a new functionality enabling the taxpayers to claim refund on account of excess payment of tax.

“Facility to claim refund on account of excess payment of tax has been enabled on GST Portal for the taxpayers,” GSTN said in a statement.

Last day, the GSTN has updated two new features such as, the facility to upload statement 4 for Refund and the facility for amendment in Registration of Core fields.

The Statement upload for Refund Taxpayers filing refund application on account of supplies made to SEZ unit/ SEZ Developer, with payment of tax, has now been provided with facility to upload Statement 4, at the time of filing Refund application.

 

GST refund drive extended till June 16

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Relief for exporters as govt extends special GST refund drive till June 16

The Central Board of Indirect Taxes and Customs (CBIC) has extended the refund fortnight for fast track clearance of pending dues to exporters by two days till June 16.

The central and state tax officials have already cleared refunds worth over Rs 7,500 crore since May 31, when the special drive to clear exporters refund was launched.

“In view of overwhelming response from exporters and pending claims, the period of refund fortnight is being extended by two more days i.e up to June 16, 2018,” a finance ministry statement said.

With about Rs 14,000 crore of exporters refunds stuck due to various mismatches, the CBIC had organised the second phase of the special fortnight to fast track clearances.During the first phase, between March 15 and 29, an amount of Rs 5,350 crore was sanctioned.

The ministry further said, in case of short payment of integrated GST (IGST), small exporters whose aggregate IGST refund amount for the period July 2017 to March 2018 is up to Rs 10 lakhs are required to submit self-certified copies of proof of payment of IGST to the concerned customs office at the port of export.

Others are required to submit a certificate from a Chartered Accountant including the proof of payment.

All GST refund claimants, whose claims are still pending, are being encouraged to approach their jurisdictional tax authority for disposal of their refund claims submitted on or before April 30, the statement said.

“In case of any problem, exporters are advised to approach the Commissioner of Customs /Jurisdictional Tax Authorities. The government is committed to clear all the remaining refund claims filed up to 30.04.2018 are still pending,” it added.

Jewellery Export Council may cancel Firestar, Gitanjali Gems’ membership

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The Mumbai-based council said earlier that the Nirav Modi/Gitanjali Gems incident is of concern to the industry and had condemned any sort of unlawful action.

The Gems & Jewellery Export Promotion Council may cancel the membership of Nirav Modi, Gitanjali Gems and related companies after Punjab National Bank named them in a complaint of alleged fraud.

“Their companies are registered with us. Nothing is known as of now but if something comes out, we will take disciplinary action against them,” said Praveenshankar Pandya, immediate past Chairman of the council. Firestar Diamond, owned by Nirav Modi, and Gitanjali Gems, which belongs to his uncle Mehul Choksi, are members of the council, the apex body of the gems and jewellery industry that represents almost 6,000 exporters.

According to a council official, cancellation of membership can cause problems for exporters as banks and suppliers often ask for certificates and membership details. “Our cancellation will reflect poorly on them in the global market,” the official said. The council hasn’t cancelled a membership in at least a decade, he said.

The Mumbai-based council said earlier that the Nirav Modi/Gitanjali Gems incident is of concern to the industry and had condemned any sort of unlawful action. “The council strongly believes that this incident will not have any contagion effect on the gems and jewellery export industry,” it said in a statement on February 17. Pandya sought an investigation into alleged irregularities by the two companies in their bank dealings. He said small exporters were now facing difficulty in securing loans worth Rs 20-30 crore from banks.

“There is a shortage of finance for small and medium diamond exporters. They are made to run from pillar to post, asked for collateral and other details like credit ratings by the banks,” Pandya said. India’s diamond exports stand at $23 billion with value addition in excess of $7 billion.

 

Source: The Economic Times

 

 

IGST payout: Govt refunds Rs 4,000 crore to exporters; asks them to clear mismatch issues

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Even as the government grapples with incomplete details and mismatch errors in refund claims by exporters, it has refunded Rs 4,000 crore out of verified claims of Rs 5,000-6,000 crore on account of payment of Integrated GST (IGST) on exports under the goods and services tax (GST) regime. Incomplete details in refund claims and mismatch errors by exporters are creating a hurdle in processing the remaining refund amount, Central Board of Excise and Customs (CBEC) Chairman Vanaja N Sarna said, adding that the exporters should come forward to rectify the errors as officials are working overtime to ensure a smooth payout of the refunds. “There are mismatch issues for which exporters should come forward and sort out. They are being requested to come forward through SMS/emails to sort out issues which are remaining. We are working 24×7 to allow refunds to exporters. They have to come and rectify their mistakes to get the refund,” Sarna told The Indian Express.

Government officials said that the total refund claims received by GST Network (GSTN) are approximately of Rs 13,000 crore, out of which claims worth only Rs 5,000-6,000 crore have been verified so far and forwarded to CBEC for facilitating disbursement of refunds. Separately, the government has also refunded Rs 2,000 crore as input tax credit to exporters, Sarna said.

Under GST, exporters are required to pay IGST on exports and then claim refunds. The second type of refunds to exporters under GST involve refund of GST paid on purchase of inputs.

For refund of IGST paid on exports, the exporters are required to file GSTR 3 B and table 6A of GSTR 1 on the GSTN portal and shipping bills on the customs EDI (electronic data interchange) system. For refund of the unutilised input tax credit on inputs used in making exports, the exporters are required to file Form GST RFD- 01A on the GST portal. In instructions issued to Customs authorities by CBEC on October 9, the CBEC had said that filing of correct EGM is a must for treating shipping bill or bill of export as a refund claim.

Explaining the errors filed in the refund claims, Sarna said that in some instances, exporters have filled metric tonne (weight) of exported goods instead of the refund amount. Or, in some cases, the shipping bill has a number in place of an alphabet. “Some things are missing, there are some blank spaces, the system won’t accept until that gets corrected. That rectification has to be done by the exporters,” she said.

Similarly, there are EGM (Export General Manifest) mismatches or invoice mismatches in the refund claims by exporters. “I have been asking CBEC officials to reach out to exporters. I recently visited Hyderabad, there we have started sending e-mails to exporters that this is the flaw, please come forward and repair it, so that we can give the refund. CBEC officials are calling people and asking them to come and rectify their mistake,” Sarna said.

As per a CBEC release dated November 29, the quantum of IGST refund claims as filed through shipping bills during July to October 2017, was approximately Rs 6,500 crore and the quantum of refund of unutilised credit on inputs or input services filed on GSTN portal, was about Rs 30 crore. The refund claims have subsequently been revised upwards to around Rs 13,000 crore, but only about half of them have complete details to facilitate complete verification, officials said.

A study as part of RBI’s Mint Street Memos series had earlier this month had stated that the implementation and refund delays under the new indirect tax regime of GST seem to have led to working capital constraints for firms, which in turn might have hurt their exports in October 2017. However, the subsequent initiatives taken by the government since then appear to have significantly alleviated exporters’ concerns which got reflected in the exports growth pick up in November and December 2017, it had said.

The study had indicated that a short-term liquidity shock impacted firms in the export sector, with the firms with high working capital/sales ratio such as such as, petroleum and gems and jewellery sectors hit the most due to the liquidity constraints.

Source: Indian Express

Exporters can claim refund this week for GST paid in August, September

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GST Network (GSTN), the company handling IT infrastructure for the indirect tax regime, has from October 10 started issuing refunds to exporters for Integrated GST (IGST).

Exporters can soon start claiming refunds for GST paid in August and September as GSTN will this week launch an online application for processing of refund, its Chief Executive Officer Prakash Kumar said today.

GST Network (GSTN), the company handling IT infrastructure for the indirect tax regime, has from October 10 started issuing refunds to exporters for Integrated GST (IGST) they paid for the month of July, after matching GSTR-3B and GSTR-1.

For August and September, while the initial return GSTR- 3B has already been filed, the final return GSTR-1 has not yet been filed.

“A separate online app for claiming Integrated GST (IGST) refunds for August and September would be made available on GSTN portal this week,” Kumar told .

GSTN has developed the app wherein exporters can save and upload their sales data which are part of GSTR-1 after filling up export details in Table 6A.

The table will be then extracted separately and after exporters digitally sign it, it would automatically go to the customs department.

The customs department will then validate the information provided in the table with the shipping bill data and also the taxes paid in GSTR-3B. The refund amount would be either credited to exporter’s bank account through ECS or a cheque would be issued.

As per data, 55.87 lakh GSTR-3B returns were filed for July, 51.37 lakh for August and over 42 lakh for September. Preliminary returns GSTR-3B for a month is filed on the 20th day of the next month after paying due taxes.

Thereafter, final returns in form GSTR-1, 2, 3 are filed by businesses giving invoice wise details of sales. The final return filing for August and September has not started yet.

Over July-August, an estimated Rs 67,000 crore has accumulated as the Integrated GST (IGST), of which only about Rs 5,000-10,000 crore will be due as refunds to exporters.

The Goods and Services Tax (GST), the amalgamation of over a dozen indirect taxes like excise duty and VAT, does not provide for any exemption, and so exporters are required to first pay Integrated-GST (IGST) on manufactured goods and claim refunds after exporting them. This had put severe liquidity crunch, particularly on aggregators or merchant exporters.

To ease their problems, the GST Council earlier this month decided a package for them that includes extending the Advance Authorisation / Export Promotion Capital Goods (EPCG) / 100 per cent EOU (Export Oriented Unit) schemes to sourcing inputs from abroad as well as domestic suppliers till March 31, thus not requiring to pay IGST.

The government is aiming to clear pending GST refunds of exporters by November-end. The first cheque after processing of July refunds was issued on October 10.

Nuclear deal between India and Japan opens up new vistas of cooperation

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Prime Minister Shinzo Abe is visiting India nearly two months after operationalisation of the historic Indo-Japan civil nuclear deal, which has added a new dimension to bilateral ties that could scarcely be imagined in the wake of the 2011 Fukushima tragedy.

The journey traversed by the two nations over the past six years reflects growing confidence in each other and depth of the strategic partnership.

Japan and India signed a memorandum of understanding for civil nuclear cooperation in December 2015, when Abe was in Delhi for the annual bilateral summit, overcoming reservations over India’s status as a nation which has not signed the Non-Proliferation Treaty.

This was transformed into a deal in November last year when PM Narendra Modi was in Tokyo for the summit.

Subsequently the Japanese government got approval from the Diet (parliament) for the nuclear deal with India.The landmark deal came into force in July this year with the completion of necessary formalities in both countries. This will enable Japan to export nuclear power plant technology as well as provide finance for nuclear power plants in India.

Besides, Japan will assist India in nuclear waste management and may undertake joint manufacture of nuclear power plant components under Make in India initiative, people familiar with the development told ET. Growing civil nuclear ties will be highlighted during Abe’s trip as one of the key elements of Indo-Japan strategic partnership, they said.

Japanese conglomerate Toshiba, which owns US-based Westinghouse, will have a major role when the US nuclear firm supplies technology for the set of six reactors in Andhra Pradesh following its bankruptcy.

Westinghouse, which was to set up six nuclear reactors in Andhra Pradesh, will supply technology while construction will be undertaken by an Indian partner. This was discussed as a way out during Modi’s visit to Washington, D.C. for ensuring the presence of Westinghouse in India following the troubles the company faced over bankruptcy.

The finance for the project from the US Exim Bank remains intact and the initiative may kick-start only in 2018. Westinghouse, which was acquired by Japanese conglomerate Toshiba in 2006 for $5.4 billion, had filed for bankruptcy in March this year. HitachiBSE 2.80 %, another Japanese firm, has a stake in GE, which is also proposed to set up reactors in India.
ET View: Enhance areas of partnership

The partnership in space, like that on the African continent, will give a new dimension to the longstanding India-Japan ties. It makes sense for India to partner with Japan to focus such opportunities in areas where the two countries have complementary strengths. The space partnership will serve as another plank in the effort to present a counter to Beijing. For New Delhi, it is also a spring board for a bigger role in the global arena. India must seize this opportunity with a clear plan.