Blockage of Working Capital of Exporters



There are a lot of apprehensions expressed in the media about the problem of blockage of working capital for exporters post-GST. There are various figures also being discussed on the blockage of such funds, which are wild estimates. Such media reports are not based on facts.

i) First of all, it may be mentioned that in respect of 66% value of exports, exporters have preferred the duty drawback scheme instead of taking actual refund of input taxes in the pre-GST regime. Duty drawback scheme was actually extended in the post-GST regime for a period of 3 months, i.e. upto 30th September, 2017, subject to that exporter not taking input tax credit under GST. This means that as of now, for 66% of the value of exports, there is no blockage of funds.

ii) The remaining 33% of exporters always used to prefer a normal refund route for taxes paid on inputs for Central Excise separately and for VAT separately and that was made available to them only after the actual exports took place and, for such class of exporters, earlier also there was a normal blockage of funds for a period of 5 – 6 months at least except for those using facility of advance authorisation. Hence, the problem is not as grievous as it is made out to be. Notwithstanding this, the Committee on Exports is working on issues of export sector.

iii) A lot of people are speculating that the refund for inputs in case of exports under GST will be available only when regular form GSTR 3 is filed for every month. This is not the case. We are trying to find a way of giving refund by linking form GSTR 1 with form GSTR 3B and, therefore, for the month of July, where form GSTR 1 is already filed, the authorities would be in a position to process the refund applications. Therefore, the exporters, who have not yet filed form GSTR 1 for July 2017, may be advised to file it immediately and not to wait till the deadline. GSTN application for refund is also getting ready. But, in the meantime, we are also finding other ways of giving refund, if necessary through a manual procedure.

iv) The Committee on Export set up by the GST Council met on 19th & 20th August, 2017 and have discussed various methods of resolving the issue of blockage of funds for the exporters. The Committee also interacted with the exporters of eight sectors who made detailed presentations on the problems being faced by them. The Committee would present the solution to their problems before the GST Council as soon as possible.

v) In the meantime, the authorities of State Governments as well as Central Government have been requested to clear the pending refund claims of Central Excise and VAT for the pre-GST period, so that the exporters will get immediate relief.




News posted by

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

Comments :


More »

Popular News





CCI Pro



Company
08 October 2026
SALES TELECALLER

HIRE NOVA

Lucknow

Graduate (Any)

View Details
Company
ARTICLESHIP 08 October 2026
ARTICLE TRAINEE

S.B.G. & CO. CHARTERED ACCOUNTANTS

New Delhi

CA Inter

View Details
Company
14 October 2026
GST & TDS ASSISTANT

AGGARWAL SANJAY & ASSOCIATES

New Delhi

B.Com

View Details
Company
Featured 21 September 2026
Consultant - Reporting

Finrep Advisors LLP

Mumbai

CA

View Details
Company
19 October 2026
Accountants/Articles (Freshers/Experienced)

ADY & CO.

New Delhi

Graduate (Any)

View Details
Company
ARTICLESHIP 07 October 2026
Article Trainee/ CMA Trainee

RMA And Associates LLP

New Delhi

CA Inter

View Details
Company
26 September 2026
Chartered Accountant

pushpganga ventures

Pune

CA

View Details
Company
30 September 2026
Senior Accountant

Codeboard Technology

Chennai

B.Com

View Details