Blame game over export refunds

The finance ministry on Wednesday said GST refunds worth Rs 14,000-crore to exporters are pending with the government and "solutions" are being put in place to fast-track clearances, refuting the claims of exporters.

By Our Special Correspondent
  • Published 31.05.18
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New Delhi: The finance ministry on Wednesday said GST refunds worth Rs 14,000-crore to exporters are pending with the government and "solutions" are being put in place to fast-track clearances, refuting the claims of exporters.

The Federation of Indian Export Organisations (Fieo) on Tuesday claimed the the process has slowed down and set pending refunds at over Rs 20,000 crore. A ministry statement said Rs 8,000 crore was sanctioned during May.

"Refund claims to the tune of Rs 14,000 crore (Rs 7,000 crore on the IGST side and Rs 7,000 crore on account of ITC) are pending with the government as on date, as against the figure of Rs 20,000 crore projected by Fieo in the press reports," the ministry said.

So far, the government has sanctioned more than Rs 30,000 crore as GST refund -including Rs 16,000 crore as IGST and Rs 14,000 crore as ITC (input tax credit). The figures of ITC include sanctions by both the central and state governments.

The government has now initiated a special refund drive from May 31 to June 14.

"This time the 'Special Drive Refund Fortnight' would facilitate all types of refund claims in which customs, central and state GST officers will strive to clear all GST refund applications received on or before April 30, 2018. This will include refunds of IGST paid on exports, refunds of unutilised ITC and all other GST refunds submitted in Form GST RFD-01 A," the ministry said.

Abhishek A. Rastogi, partner at Khaitan & Co, said "as delay in refunds results in severe liquidity problems for exporters, provisional refund of 90 per cent should be sanctioned within 7 days of filing as per the statutory provisions.

"Any deviation with the statutory timelines can be taken to court by way of writ petitions especially in case there is a considerable delay. Special refund drives initiated by the government are a welcome move but should be implemented in spirit."

In the first phase of refund fortnight observed between March 15 and March 30, the Central Board of Indirect Taxes and Customs (CBIC) had cleared refunds totalling Rs 17,616 crore. This comprised Rs 9,604 crore of integrated GST refunds, Rs 5,510 crore ITC refund by the Centre and Rs 2,502 crore ITC refund by the states.

The CBIC is implementing a solution whereby the refunds held in GSTN, in cases where the exporters have mistakenly declared their export supplies as domestic supplies, would now be transmitted to the Customs EDI system.

"On receipt of the records from GSTN, the customs system would automatically process the refunds for sanction, if no other errors are committed by exporters," the ministry said.