26th Meeting of the GST Council dated: 10.03.2018


New Delhi, dated: 10.03.2018
                           26th Meeting of the GST Council

Subject: Extension of tax exemptions for exporters for six months

Sending a strong positive signal to the exporting community, the Council today
decided to extend the available tax exemptions on imported goods for a further 6 months
beyond 31.03.2018. Thus, exporters presently availing various export promotion
schemes can now continue to avail such exemptions on their imports up to 01.10.2018,
by which time an e-Wallet scheme is expected to be in place to continue the benefits in
2. In a related development which would benefit the exporters, the Council reviewed
the progress in grant of refunds to exports of both IGST and Input Tax Credit. The Council
appreciated that the pace of grant of IGST refund has picked up. Thereafter, the Council
directed GSTN to expeditiously forward the balance refund claims to the Customs/Central
GST/State GST authorities, as the case may be, for their immediate sanction and
3. It may be recalled that in its meeting held on 06.10.2017 the Council had noted
that exporters are experiencing difficulties of cash blockage on account of having to
upfront pay GST / IGST on the inputs, raw materials etc. / finished goods imported /
procured for purposes of exports. An interim solution was found by re-introducing the preGST
tax exemptions on such imports. Additionally, for merchant exporters a special
scheme of payment of GST @ 0.1% on their procured goods was introduced. Also,
domestic procurement made under Advance Authorization, EPCG and EOU schemes
were recognized as ‘deemed exports’ with flexibility for either the suppliers or the
exporters being able to claim a refund of GST / IGST paid thereon. All these avenues
were made available upto 31.03.2018.
3. The permanent solution agreed to by the Council was to introduce an e-Wallet
scheme w.e.f. 01.04.2018. The e-Wallet scheme is basically the creation of electronic eWallets,
which would be credited with notional or virtual currency by the DGFT. This
notional / virtual currency would be used by the exporters to make the payment of GST /
IGST on the goods imported / procured by them so their funds are not blocked.
4. On 16.12.2017, Finance Secretary constituted a Working Group with
representatives of Central and State Governments to operationalize the e-Wallet scheme.
After reviewing the progress, the Council noted that whereas some preparatory work had
been done, more needs to be done to address a large number of technical, legal and
administrative issues that have been identified. The Council appreciated that this would
require more time. The Council was also unanimous that there should be no disruption
that may affect the exports. Accordingly, the Council agreed to:
(a) Defer the implementation of the e-Wallet scheme by 6 months i.e., up to
01.10.2018; and
(b) Extend the present dispensation in terms of exemptions etc. which is
available up to 31.03.2018, for a further 6 months i.e., up to 01.10.2018.