MADURAI: The Tamil Nadu Chamber of Commerce and Industries urged the Union Government to extend the exemption of Integrated Goods and Services Tax (IGST) on transport charges for goods exported by ships and airways from India.
In a statement, chamber president, Dr Jegatheesan said the Central Board of Indirect Taxes and Customs (CBIC) introduced IGST exemption in 2018 on transport charges for goods exported from India by ship and through the air and extended it twice.
The last such extension ended on 30 September 2022. "Since this exemption has not been extended, 5% GST will be levied on freight charges for sea freight and 18 per cent GST on freight charges for air freight. This increases the cost of goods and makes it difficult for exporters to compete on price with other countries in the international market and export will be greatly affected. Since the RBI has raised the repo rate to 5.9%, the interest on commercial loans has increased," he said.
Stating that in many cases the air freight charges are found to be higher than the value of the exported goods, the statement added, "Due to the geo-political tensions, the impact on global trade distribution, the fall in the value of the Indian rupee against the US dollar has widened the trade deficit and the export growth rate of the country has decreased."