Extend benefits of tax schemes due to pandemic-led disruption, exporters ask government

Several exporters who had availed government schemes for lowering tax outgo against promised exports quantity have reached out to the government, seeking concessions citing continuing Covid-19 disruptions.

Exporters claim they have not been able to meet export obligations due to the pandemic. They say the government should either allow them to continue to avail the scheme by extending their time period or give them tax credit that they can adjust against future tax liabilities.

Some of the exporters are also looking to approach the courts in this regard.


In most cases, the schemes that the exporters availed have been stopped, but many of the old schemes are continuing and will get over only by 2022.

The government had introduced several schemes, including Export Promotion for Capital Goods (EPCG), for exporters, offering several benefits under the indirect tax regime.

The government has issued licences permitting duty free imports to eligible exporters to avail these schemes.

"For a lot of these licences issued prior to implementation of GST, it is not possible in various cases for exporters to meet the export obligation," said Abhishek A Rastogi, partner at law firm Khaitan & Co.

"Under the erstwhile regime, credit was eligible to the extent of the countervailing duty. Under the GST regime, IGST paid subsequent to the assessment or reassessment becomes recoverable as arrears of tax and input tax credit is denied," he said.

Rastogi is defending some such exporters in different courts.

Some of these schemes allow some companies a leeway in certain situations, experts said.

Advance authorisation, for instance, is a scheme whereby a company can import raw materials without paying duties on that if it can demonstrate that these raw materials are to be used in a final product that will eventually be exported.

EPCG is similar to advance authorisation but it has certain different conditions to be fulfilled by the companies.