GST Refunds Made Easier For Low Value E-Commerce Exports

(MENAFN- IANS) New Delhi, Sep 5 (IANS) In what comes as a relief to e-commerce exporters, the GST Council has approved DGFT's proposal to eliminate the value threshold for GST refunds on low-value consignments.

The relevant section of the CGST Act, 2017 will be amended to allow refunds for exports made with payment of tax, regardless of value.

This long-awaited reform addresses the concerns of small exporters, particularly those shipping through courier or postal services, and is expected to greatly simplify procedures and facilitate low-value e-commerce exports, said Commerce Ministry.

The government has unveiled a set of GST rate rationalisation measures aimed at lowering costs, addressing duty-related distortions, and boosting competitiveness across diverse sectors such as paper, leather, wood, handicrafts, commercial vehicles, tractors, food processing, textiles, toys, and packaging materials.

The removal of the value threshold for GST refunds will significantly benefit small and e-commerce exporters by making even low-value shipments eligible for refunds.

This will improve cash flow, reduce working capital constraints, simplify compliance, and streamline refund procedures, particularly for consignments shipped via courier or postal services.

As a result, MSMEs and small sellers can participate more effectively in international trade, boosting the growth of low-value e-commerce exports, said the ministry.

Industry bodies have welcomed the reforms, emphasising that measures such as faster export refunds, provisional relief under the inverted duty structure, and rationalisation of rates across key sectors will ease liquidity pressures, reduce working capital blockages, and strengthen supply chains.

These steps are expected to boost manufacturing, support MSMEs, enhance export competitiveness, and ensure cost benefits are passed on to consumers.

GST cuts on paper packaging, textiles, leather, and wood from 12–18 per cent to 5 per cent will lower production costs, enabling exporters to offer more competitive prices.

Faster refunds and rate rationalisation across textiles, handicrafts, leather, food processing, and toys will support MSMEs and high-demand export sectors.

GST on trucks and delivery vans, reduced from 28 per cent to 18 per cent, and lower GST on packaging materials, will cut freight and logistics costs, enhancing competitiveness.

GST on toys and sports goods cut from 12 per cent to 5 per cent will incentivise domestic production, counter cheap imports, and tap rising global demand.

Correction of inverted duty structures in textiles and food processing, along with reduced GST on eco-friendly products (bamboo, bagasse, jute boards), ensures smoother refunds, better cash flows, and alignment with global sustainability standards, said the ministry.

The rationalisation of GST is expected to lower input costs for MSMEs and exporters, reduce inflationary pressures on consumers, and correct structural anomalies such as inverted duty structures.

By easing liquidity constraints and streamlining refund processes, the reforms will unlock working capital, strengthen supply chains, and enhance the overall competitiveness of Indian industry.

These measures will also promote 'Vocal for Local', bolster domestic manufacturing, and support India's ambition to emerge as a global hub in sectors such as textiles, tractors, food processing, auto components, and handicrafts, while ensuring that the cost benefits are ultimately passed on to consumers.

-IANS

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