An organisation of exporters wrote to Union Finance Minister Nirmala Sitharaman, urging her to extend the Goods and Services Tax (GST) exemption on export freight that lapsed on September 30.
The Federation of Indian Export Organizations (FIEO) expressed concern that if the exemption is not extended, it will add to their liquidity challenges amid rising interest rates.
Since its introduction in 2018, the government had extended the exemption twice till September this year.
"Overseas freight rates had increased by 300350 per cent from preCovid levels. Now, there has been a slight decline in such rates, but these are still 200250 per cent higher than that of the 2019 levels," FIEO President A Sakthivel said.
If the exemption is not renewed, exporters will be required to pay GST at 18 per cent on export freight, which will increase the logistical costs for Indian goods in the international market, he said.
"Due to the recent increase in interest rates by the Reserve Bank of India, t