IGST, Cess Exemption To Export Units, Software Parks Extended Till March 2019
The finance ministry has extended the exemptions granted to Export Oriented Units and Software Technology Parks of India from payment of the integrated goods and service tax and compensation cess by six months till March 31, 2019.
The IGST and cess exemption to EOUs and STPI was scheduled to come to an end on Sept. 30.
Through a notification, the Central Board of Indirect Taxes and Customs said that taxes would be levied on these units under the GST ambit with effect from April 1, 2019.
PwC India Partner and Leader (Indirect Tax) Pratik Jain said before introduction of GST, there was no Customs duty or special additional duty applicable on import of goods by EOU/STPI. However, with the introduction of GST, the government wanted to do away with the exemption and levy IGST on such imports with a refund later, if needed.
While the exemption was removed from July 1, 2017, later it was brought again from Oct. 13, 2017 till April 2018, primarily on account of blockage of funds for exporters and refund related issues.
"The exemption was later extended till Oct. 1, 2018 with an expectations that e-wallet scheme would come in by then, replacing the upfront exemption. However, it seems that it will take more time and hence the exemption has now been extended till end of the financial year 2018-19," Jain said.