New Delhi, Aug 3 (KNN) While on the one hand the Government is announcing ease in international trade as per the trade facilitation agreement with WTO, on the other hand conservative customs regulations are throttling MSME exporters.

And this is happening when MSMEs are enhancing their share in the export basket of the country in spite of a sluggish global market and dismal performance of the corporates.

The instant case is the recent notification on export under Letter of Undertaking without paying GST.

The notification says only exporters with at least Rs. 1 crore worth of exports will be eligible under the scheme.

So all MSME manufacturer exporters with intermittent export orders or those who are striving  for entry in the export market will have to pay the applicable GST first and then wait for the refund.

Recently Mrs Sitharaman, the Commerce Minister was on record that the share of the MSMEs in exports are continuously increasing and has increased from 45% to 55% in the recent periods.

In absolute terms MSMEs export nearly 150 billion US dollar worth of goods and dominates sector like ready made garments, leather items , engineering goods etc.

Now the new customs order means that a new entrant or an exporter with Rs. 99.99 lakh worth of export last year will have to shell out may be 18 lakh worth of IGST in cash and wait till   reimbursement by the GST authorities.

On the one hand this will this force them to arrange additional working capital, on the other the interest on the additional fund will eat away the already slender margin.

There are widespread reactions from the MSMEs on the present situation.

Mr. Animesh Saxena, an established MSME garment exporter opined that the entire GST  process for export  is going to impact Apparel Export Industry very badly .

“India's 90% Apparel exports are done by MSME. Government has withdrawn the major portion of Duty drawback post GST . from  11% to 3% only,  which will make whole business unviable”, commented Saxena.

“No international buyer is willing to increase the price due to GST and ultimately may shift to neighbouring countries, causing huge job loss in this labour intensive sector, lamented Saxena.

Commenting on the asymmetry, Anil Bhardwaj, Secretary General, FISME, the leading federation of MSMEs, mentioned that Government should come out of the perception that all tax evaders are in the MSME sector only.

Else what other purpose the Rs. 1 crore  export for eligibility for LUT means, asked Bhardwaj.

Arun Agarwal, an MSME exporter also opined that the Rs.  1 crore stipulation is  a biased approach.

“I export as per orders received from overseas buyer. So if one year I do not get foreign order, do that wash out my export credentials”, asked Agarwal. (KNN/ DB)