Traders want GST exemption extended on export freight

Exporters have sought an extension of previously granted exemption from Goods and Services Tax (GST) on export freight, citing that a non-extension will add to their liquidity challenges.

In a letter to finance minister Nirmala Sitharaman on Sunday, the Federation of Indian Export Organisations (FIEO) said that overseas freights have increased 300-350% from pre-Covid level and refund of GST through input tax credit comes with a lag of two-three months, which affects cash flows.

The exemption from GST on export freight, introduced in 2018, ended on September 30 after being extended twice. Exporters now have to pay 18% GST on export ocean freight for which they can claim a refund.


"The global trade is entering into a very difficult phase as countries are facing high inflation and impending recession affecting demand. The rate of growth in exports is also coming down as can be seen in export growth rate from April-August 2022," FIEO said.