Kolkata, Nov 26 (UNI) EEPC India has appreciated the GST 2.0 reforms, noting that the simplified tax structure promises to accelerate economic growth while delivering substantial benefits to both consumers and industry.
Participating at the fourth meeting of the reconstituted Board of Trade (BoT), EEPC India chairman Pankaj Chadha emphasized that these forward-looking reforms will not only enhance ease of doing business but also strengthen the government’s efforts to safeguard and empower local industry.
While appreciating the GST reforms and their positive outcome, EEPC India noted that some cases of inverted duty structure still persist in the engineering sector. For instance, in the case of bicycles, while the final product is charged at 5 percent GST, steel, which is the basic raw material, is charged at 18 pc GST. The exporter can claim input tax credit in such cases but it is time-consuming.
“To address this issue, we suggest that the GST refund process be fully automated. We also request that 90% of the refund be given without verification. The rest 10% can be paid upon verification. This will help the exporters to pass on the benefits to the customers.” Chadha said.
EEPC India noted that securing the engineering sector’s position in the traditional markets, including the US and the EU, remains its priority and proposed to include steel in the ongoing trade negotiations with the two major partners.
“The implementation of the 50% tariff under Section 232 has significantly impacted our exports to the US. We suggest that steel, aluminium, and auto parts should be included in the BTA negotiation, and a favourable tariff may be worked out. This is crucial for the survival of a large number of MSMEs,” Chadha said.
In the case of the EU, EEPC India has suggested maintaining the status quo in terms of both quota and the out-of-quota tariffs for steel. The EU’s safeguard measures on steel imports, which were originally set to expire on June 30, 2024, have been extended for two more years until June 2026.
Such an extension, as argued by many Indian exporters, would negatively impact India’s iron and steel exports of the TRQ (tariff rate quota) quotas that were levied by the EU on 28 products in the year 2019, which was later extended for 26 steel products.
EEPC India has called for making steel also a part of the free trade agreement (FTA) negotiations with the EU. During the BoT meeting, EEPC India also noted that the carbon pricing mechanism applied by the EU imposes additional costs on carbon-intensive products like steel and aluminium, posing challenges for Indian exporters reliant on conventional energy.
EEPC India also highlighted that Indian exporters are facing payment delays due to sanctions on Russian banks.
It was noted that the rupee-ruble trade mechanism has not worked smoothly, and some multinational banks of Indian origin are reportedly not accepting payments from Russia and not issuing e-BRC as they are afraid of losing business in North America and Europe due to sanctions on Russia.
There is a need to establish a robust and reliable direct rupee–ruble exchange mechanism for settling financial transactions between the two countries. This can be announced monthly, which will help the exporting community do business with Russia.
