Finance Ministry urged to have a re-look at not allowing IGST for exports

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The Finance Ministry has been urged by the Commerce Ministry to have a relook at the Budget proposal of disallowing integrated goods and services tax (IGST) for exports before the Finance Act is finalised. Exporters have said that over time, the IGST refund system had become seamless, whereas input tax credit refunds took longer. Besides, while capital goods input taxes can be adjusted under IGST, it is not permitted under the input tax credit system. The move to disallow IGST for exports was aimed at plugging large-scale frauds in the GST system. The government came across cases where several exporters were wrongfully claiming IGST refunds, it is learnt. Therefore, it decided to do away with it. The Commerce Department has flagged the concern of exporters to the Revenue Department, as per a report.