The reforms in the Goods and Services Tax (GST) announced by the Ministry of Finance on Wednesday could help exporters expand their business and capture larger markets, Commerce Minister Piyush Goyal said on Thursday.
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 is expected to improve cash flow, ease working capital constraints, simplify compliance, and streamline refund procedures.
“Those exporters who have been affected by any action by a third country will also get a chance to try and capture the bigger Indian market,” said Goyal. With the cost of several raw materials coming down, exporters’ production costs will reduce. At the same time, lower tax slabs are expected to boost consumer demand, helping businesses capture more market share at competitive prices.
“Growing demand will lead to economies of scale and productivity gains. And it will make us one of the most cost-competitive and high-quality suppliers, both domestically and internationally,” Goyal added.
The GST Council has also cleared the Directorate General of Foreign Trade’s (DGFT) proposal to scrap the value threshold for refunds on low-value exports. The move will allow small and e-commerce exporters using courier and postal routes to claim refunds on all consignments, easing cash flow and compliance. The Ministry of Commerce affirmed that this reform will strengthen supply chains, ease liquidity pressures, and boost MSME competitiveness in global trade.
“With economies of scale helping Indian manufacturing become more productive and competitive, and reducing costs, it will also help keep inflation low. This particular GST rate rationalization could not have come at a better time,” Goyal said.
The 56th meeting of the GST Council, which lasted over 10 hours on Wednesday, approved the next generation of reforms. The new GST structure, effective from September 22, will feature a broad two-slab system of 5% and 18% for most goods, and a rate of 40% on super luxury, sin, and demerit goods.