Coimbatore : Tirupur Exporters’ Association (TEA) today urged the Centre to extend the IGST Payment exemption for machinery imported under EPCG (Exports Promotion Capital Goods) scheme.

The notification exempting from payment of IGST while importing machinery under EPCG scheme is valid till September 30 only and in case, if it is not extended, exporting units have to pay IGST upfront which is an additional burden to the units, TEA President, Raja M Shanmugham said in a letter to Union Commerce minister, Suresh P Prabhu.

The concern is that upfront payment of IGST will affect the working capital of the exporting units as the GST refund through Input Tax Credit refund route will take time to receive the amount, he stated adding that as more than 80 per cent of the exporting units are MSMEs, they could not meet out their financial requirements and ultimately affect day to day operations.

As the exporting units cannot get IGST refund if they did not have a domestic sales, was a major issue and in Tirupur cluster, about 95 per cent of the exporting units did not have domestic sales, Raja Shanmugham pointed out.

The continued modernization was needed for the garment exportingunits as the buyers were insisting for consistent quality and moreover insisting the units to install latest state of art technology machinery, he said in the letter.