E-wallet scheme for exporters will be implemented in October
In past few years many steps have been taken towards Export Promotion in India. Currently the Goods and Services Tax Council has made it even easier for the exporters by extending tax exemption on imported goods. The council will also launch e-Wallet in October for the exporters to claim GST return.
Tax Extension and Launch of e-Wallet
In a meeting held in October 2017, the council had declared the final date for Tax Exemption on imported goods for the exporters until 31st March 2018. In a recent announcement the council has extended the time till October 1st 2018. Now the exporters can import products without GST until October.
The council also announced about e-Wallet launch in the recent meeting held in February 2018. The e-Wallet will be launched on October 2018.
- E-Wallets: It is an electronic wallet for the exporters by the council. In this account the Directorate General of Foreign Trade will credit virtual currency for the exporters. This would help them to pay the tax.
- Aim: The main reason for launching the e-Wallet is to stop blocking cash of the exporters. Through this virtual currency exporters will easily pay the GST and IGST for their import or procured goods. This will stop blocking their liquid.
- Implementation: E-wallet was supposed to start from April 1st 2018, as per the council meeting held on October 2017. Around December 2017, the council had stated that it will take few more months more to start it. Finally the council had declared that from 1st October 2018, the e-Wallet for exporters will be launched.
How e-Wallet Works
- As mentioned that the wallet will be an electronic money saving wallet, the Foreign Trade Directorate will transfer money to each exporter’s e-wallet. This would be notional money or virtual fund.
- The exporter can use that virtual money only to pay Integrated GST or GST levied on the imported goods immediately within the time. This will not affect their real fund. As IGST and Input tax Credits can be claimed later, exporters can claim the virtual money they have paid as GST & ITC.
- With this facility funds won’t get blocked for the exporters for a long time. They can easily use their funds for their business while paying tax through e-Wallets at the same time.
The council had stated that most of the formalities for the e-Wallet launch have been done. Some of the technical and legal processes are still pending. Once they are done, the e-Wallets can be launched officially. Also the council will make sure that the claim of GST/ITC will process for exporters immediately without delay.
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