Exporters faces “Liquidity Crisis”

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At a time when exporters are hit with a slump in global market in the wake of Covid-19, they have to cope with a tedious process of getting GST refunds and the MEIS (merchandise exports from India scheme) entitlements due for the period much before the ₹2 crore limit was fixed.

The piling dues have led to liquidity crunch for exporters, for which they are approaching banks for extension of moratorium. The MEIS scheme was designed to offset infrastructural inefficiencies and associated costs involved in exporting merchandise products.

Mahesh Desai, chairman, EEPC India, the apex body of engineering exporter said that the body was receiving grievances from members that the shipping bills were not receiving validation in time for processing GST refunds. The July bills, submitted within due dates have not been validated so far.

The government has imposed a ₹2-crore reward limit per import export code (IEC) under the MEIS from 1st September 2020. However, this year exporters have not received the entitlements even for April-August. Greater clarity is required and dues as per the old norms should be paid for the period as there is no limit on the rewards, adding that exporters are also confronted with lack of access for GST refunds through the concerned GST portal.

While the global trade is re-opening, exporters are facing huge problems of logistics, regulatory hurdles as also skewed demand. Under such circumstances, the exports need to be supported by the government. Engineering exports generate large scale employment , particularly in the small and medium enterprises.

The lockdown has been officially lifted but there are several problems still being faced by manufacturers. The shortage of labour is still being felt. Despite Union home ministry guidelines to allow movement of personnel from one state to the other, their movements are being restricted. Banks are also not willing to extend the moratorium on loan repayments while GST dues are piling up coupled with MEIS entitlements.

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