Industry And Cluster | News & Insights

Textile Exporters Body HEWA writes to PMO and urged Government to resolve the difficulties being faced by Textile Exporters catagorized as ‘Risky’

Published: August 14, 2020

The Home Textile Exporters’ Welfare Association (HEWA), is a non profit association of small and medium Indian Home Textile Exporters. During normal course of business, it has been observed that whenever any textile exporter is included in ‘Risky Exporters’ list, his all types of Export benefits such as Duty drawback, GST refund and RoSCTL gets suspended by central authorities and all his shipments are subjected to 100% physical Examination by customs field formations due to which overseas orders usually gets delayed and which in turn result in penalty and cancellation of the order.

Exporters who are being red flagged by DGARM in the ‘Risky Exporters List’ are treated as defaulters by department even before giving them a chance to be heard. As resultant the image and reputation of the exporter gets tarnished in the market even before the verification process is completed. Even as the Latin phrase ‘Audi Alteram Partem’ says that
adhering to the principle of natural justice no person should be condemned unheard.

There is another famous saying that ‘one bad fish can contaminate a pond’. The same has happened to the Indian Exporters. Due to a few dark horses in the industry, who have fraudulently taken refunds of IGST, one can’t let the whole community of innocent small and medium exporters to suffer on that account.

HEWA demand strict action against wilfull defaulters and suggest the Government to ensure that the honest exporters does not face any trouble.Many exporters have brought to the notice of HEWA that even after their successful verification by providing all necessary documents as per SOP to the field formation and after getting the NOC, their names are still shown under risky exporter list as and when any exporter goes online departmental
website for any transaction. Exporters are facing heavy cash crunch and capital blockage as they does not know as to whom they should contact either DGARM, Local CGST Office, RMCC or Custom office for removal of ‘Risky Exporter’ flag tagged against their Firm’s name.

HEWA urge the Government to split the process of ‘Red Flagging’ into various steps, such as:
1. General verification of the Exporter by field formation to verify his principle address and      their presence.

2. If the exporter is not available at his principle address or the premises is locked then   there is a possibility of his being operating for another location. In such cases the field formation may try to establish contact with him through mobile phone or email.

3. In case the exporter is still untraceable then his details/information can be sought by the department from Bank where he is maintaining and running his account, or from the Port if he is still continuing business and sending shipments.

4. In case there is substantial evidence on record that Exporter is still untraceable and has absconded and not doing any business only then appropriate legal action should be initiated against him as per the law and thereby inserting ‘Red Flag’ online against his firm’s name.

5. In case the exporter is still doing business by sending shipments through ports, then it means that he has not absconded and is still traceable from Banks and the Ports. Then he is not an absconder. Then in such cases he should be compelled to supply required documents to the field formation as per SOP and at the same he should not be harassed by suspending his refunds and by tagging ‘Red Flag’ against his name.

6. Appropriate direction must be issued to field formations to expedite the 100% physical
examination process of shipments to avoid unnecessary delay. As it has been observed in many cases that buyers often impose penalty on the exporter for delayed delivery of shipment at their ports and in many cases it has been found that buyers even cancelled the
order for delayed shipment.

7. Hence, all those exporters of whose verification by field formations is under process they
should not be addressed or declared as ‘Risky Exporters’ or ‘Red Flagged’ until and unless they are found defaulters.


further urge that during this COVID-19 lockdown period, the Exporters are already facing liquidity crunch due to delayed overseas payments and large scale migration of labourers and reduction of working hours due to Lockdown, shortage of working space due to adherence of social distancing norms for labourers while they are at work. The equilibrium between demand and supply has been disturbed.

The small and medium textile exporters were not ready to cope up with such pandemic situation post declaration of countrywide COVID-19 Lockdown since 25th of March 2020.
As Indian textile exporters are not well versed with the existing new GST tax regime and they still lack technical know how. Hence they are supposed to depend of tax consultants and have to pay hefty amount as professional fee for their consultation and resolving their matters with field formations.

In such troubled times, HEWA request the Government for extending it full support to textile export industry by relaxing the complicated new GST tax regime.

In the wake of circumstances quoted above, the HEWA, on behalf of small and medium textile exporters humbly pray before Hon’ble Prime Minister of India Shri. Narendra Ji Modi for extending cooperation in these testing times so that Indian Textile Exporters can make
their best possible contribution towards the cherished goal of ‘AATMA NIRBHAR BHARAT MISSION’.

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