COVID-19 pandemic to hit MSME exporters more

Micro, small and medium enterprises (MSME) exporters will be impacted more by the current lockdown on account of COVID-19 pandemic as the sector accounts for over 45 per cent of the country’s total outbound shipments, according to trade experts. They said the magnitude of the impact on MSME exporters can be gauged from the statement of the World Trade Organisation (WTO) which has projected that global trade in goods is set to decline steeply between 13 per cent and 32 per cent in 2020 as countries across the world are battling the pandemic.

 India will suffer very badly and the biggest impact will be on the MSME exporters. They will also face issues in calling back their workers as several of them have migrated to their villages and towns.

India’s major export items such as petrochemicals, gems and jewellery, automobiles and auto components, cotton yarns and textiles, apparels, marine products, bovine meat among others are likely to receive a jolt primarily due to slump in demand in its major markets and disruption of supply chains which are integrated across countries.

This is the time India should transform this calamity into an unprecedented opportunity to make India the manufacturing hub and realize its ‘Make in India’ objective in real sense,” he added. Assistant professor and expert on agriculture economics Chirala Shankar Rao said there is a need to give special focus to MSME exporters engaged in agri products as there is a surge in demand for food products in global markets due to coronavirus outbreak.

 World trade is expected to fall by between 13 per cent and 32 per cent in 2020 as the COVID-19 pandemic disrupts normal economic activity and life around the world.

April GST collections seen down 40%, May mop-up too to be hit

With the lockdown hitting transactions as well as tax payments by businesses in the last week of March, the government’s gross GST revenue in April could fall as much as 30-40% of the average monthly revenue collections achieved in FY20, which was around Rs 1 lakh crore, analysts said. Large companies, especially from the fast moving consumer goods (FMCG) segment, are likely to rescue the mop-up to some extent, they added.

The exception to this is one of the white goods makers, whose sales witnessed a completely slump in the last week of March. However, the firm had normal business and sales in the previous three weeks of the month.

The GST Council has estimated that around 7,000 GST-registered firms contribute over 90% of the revenue. Other smaller firms, which constitute over 1.2 crore GST taxpayers, are likely to defer their compliance to the last week of June, as allowed by the government without any interest, penalty and late fees as a relief measure.

Govt set to release Rs 20,000 cr pending GST compensation to states soon

The finance ministry is set to release Rs 20,000 crore in pending goods and service tax (GST) compensation to states soon, Business Standard has learnt. This will not be from the compensation cess, but from the Consolidated Fund of India, and comes days after the Centre disbursed Rs 17,287 crore to states as devolution and disaster funds. The finance ministry and the Prime Minister’s Office are also working on another stimulus package, which is expected to be announced soon. There is no definitive number yet on the quantum of the package, which will again be aimed at the urban and rural poor, micro, small and medium enterprises and the sectors most affected by the coronavirus disease (Covid-19) pandemic and the subsequent 21-day nationwide lockdown.

Officials working on the stimulus package say that a lot of ever-changing factors are still under consideration. These include active cases of Covid-19, hotspots, and the status of the lockdown after April 14. “The revenue department has been authorised to clear Rs 20,000 crore in GST compensation dues to states,” said a top government official. “We can only disburse compensation to states from the compensation cess fund. Since it is not available, approval has been given for releasing it from the Consolidated Fund,” said a second official. Even with the Rs 20,000 crore distributed among states, it will still be a fraction of what they have been demanding in financial support and clearance of pending dues.

CBIC has taken various trade friendly initiatives to avoid any possible disruptions from COVID19.

24*7 Customs Clearances of Goods to avoid any supply disruptions

Custom formations are working for clearance of both import & export cargo. Assessment, examination and ancillary work such as bond acceptance, warehousing, port clearance, amendment to documents is happening smoothly

Dedicated Novel Corona Virus helpdesk for Exim Trade stakeholders on CBIC website to facilitate quick resolution of issues faced

Importers can submit undertakings in lieu of the requisite bonds during the lockdown period which will be replaced by proper bonds paper

The time limit for completion of proceedings and filing of any appeal under the Customs Act, 1962 has been extended till 30th June 2020 through an Ordinance

Based on email requisitions, computers and related accessories have been permitted by the Customs to be transferred to residences of employees of Software Technology Parks of India (STPIs), to facilitate work from home

Late fee charged on delayed filing of Bill of Entry on import consignments from COVID19 affected countries on account of non-receipt of documents has been waived off

Importers con submit undertakings during the lockdown period which will be replaced by proper bonds later

Ordinance on relaxation of time limit for proceedings has been passed under the Customs Act, 1962 till the 30th June 2020

Regular coordination with District Administration/Police authorities is being maintained for smooth movement of EXIM cargo

Recognizing the difficulties faced by trade in taking delivery of imported cargo, MHA has revised its guidelines, feedback from owners of Customs bonded warehouses, indicates many warehouses and godowns are open and functional

As per MHA directive, employees working for Custom Brokers (CBs) services are permitted to travel to the ports or Customs House on passes issued by the port

Zonal chiefs and the Board ore promptly monitoring the situation through video conference meetings with the field officers and trade to resolve the emerging issues