The commerce ministry headed under Nirmala Sitharaman will be reviewing the foreign trade policy (FTP), also referred to as black book within import-export circles. The review will be undertaken basically to address rising concerns of exporters after GST got implemented.

A senior official from the ministry too conceded that various exporters had concerns with the working of GST, and the handling of duties, and duty drawbacks.

An unnamed official was quoted as saying by the PTI (Press Trust of India) as, "We cannot let them (exporters) suffer...We want to build in something in the FTP which addresses those issues of exporters."

The Federation of Indian Export Organisations (FIEO), an association that has been organizing various conferences and industry outreach programs, stated that exporter' concerns stemmed from the fact that they had to arrange funds to pay GST upfront, while the refund occurred at a later date of exports.

First paying the duty and then seeking refunds will lead to blockage of funds for over six months in many cases, thus affecting competitiveness of exports, the FIEO said.

According to several exporters, working capital to the tune of Rs 1.85 lakh crore would get stuck annually with the government under the GST. Unblocking this amount could strategically help the manufacturing sector reduce costs as they need not borrow more from banks.

The commerce ministry releases FTP once every five years. The current policy was drafted in 2015, with an end date of 2020. There was talk of a mid-term review in 2016 which did not materialize. There was also clamor regarding the mid-term occurring in July, however the commerce minister suggested that reviews would be rolled only post GST.

The ministry was studying and working on representations from various stakeholders. The ministry would also utilize the time from July 1, the date GST was implemented, to study feasible targets for exports.

"Lot of work is happening. We are looking at it (FTP) post GST. Post GST implementation, we are taking exporters inputs and trying to address that," said an official who did not wish to be identified.

Besides concerns on duties and upfront payment of taxes, exporters have also suggested that the limited use of duty credit scrips can now be utilized for paying customs duty and unfortunately not IGST (integrated GST).

An e-wallet mechanism was suggested by the commerce ministry to the GST council in order to work around the blockage of funds. Doing so will ensure virtual payment of GST and thereby ensure smooth flow without impacting the GST chain.