Rs 50,000 crore of exporters’ GST refund stuck | Business Standard News–27.11.2017

At least Rs 50,000 crore worth of goods and services tax (GST) refunds of exporters for four months are stuck, impacting working capital and outbound shipments.
Only about Rs 350 crore of refunds on account of integrated GST (IGST) have been released by the government for July, against Rs 750 crore claimed by exporters. Besides, the input tax credits, which form a chunk of GST refunds, are yet to be released.
“Refunds are going on. There was a delay on account of unavailability of forms pertaining to refunds on the GST Network. Then there was no facility for correction. Now we are expediting refunds,” said a government official.
According to the industry, this will reflect in the November export numbers as exporters are unable to take further orders. “Rs 50,000 crore worth of refunds are stuck at the moment. Exporters are unable to take further orders as they do not have liquidity. It will certainly reflect in the November export figures,” said Ajay Sahai of the Federation of Indian Export Organisations.
The government, however, claimed the refund process was on course and the delay was on account of the GST Network not coming up with the refund form on time. The government also said only Rs 550 crore (of the Rs 750 crore claimed) worth of IGST refunds were valid for July.
Exporters said it was a very difficult situation for them.
India’s merchandise exports declined for the first time in 14 months in October as exporters struggled with working capital constraints due to delayed refunds under the GST regime. It widened the trade deficit to the highest in 35 months. Exports fell 1.1 per cent in October to $23.1 billion.

About 85 per cent of the refund due is on account of input tax credit, which is yet to start, while only 15 per cent is on account of IGST.

IGST refund claims worth Rs 200 crore are invalid, according to the government, on account of mismatches of shipping bill numbers and claims pertaining to drawback.

“There are cases of mismatch of refunds. Only Rs 550-crore claims are valid for July. If someone has left out a zero or something it is not the department’s fault. Rs 200-crore refunds relate to cases that have availed duty drawback, and hence not eligible for tax refund,” said the official. The duty drawback scheme was extended in the post-GST regime for three months, up to September 30, subject to exporters not taking input tax credit under GST.
Form 6A of GSTR 1 has been introduced on the GST portal for exporters to claim refund of IGST paid at the time of export. An exporter would have to fill details of shipping bill and tax paid in the relevant month for a claim. Amid constant complaints of working capital blockage by the industry, the GST Council had decided to expedite refunds for exporters from October 10.
Sahai said: “The government has released a very small amount for July, and that too the IGST refund. Exporters have paid tax for four months. And the IGST refund that has begun is only for July. The ITC is still not operational.” The FIEO met Commerce and Industry Minister Suresh Prabhu last week, requesting expedited release of refunds.

via Rs 50,000 crore of exporters’ GST refund stuck | Business Standard News

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s