Another fortnightly drive to expedite GST refunds

By: | Published: May 31, 2018 6:05 AM

The government will undertake a second special fortnightly drive since March to liquidate pending refund claims made by exporters amounting to Rs 14,000 crore, the finance ministry said in a statement.

GST, input tax credit, GST refund, FIEO, gst act, EDI system, GSTNThe refunds include those on account of integrated GST (IGST) paid on exports, unutilised input tax credit (ITC) and other GST refunds submitted in form GST RFD-01A (for manual processing of refunds).

The government will undertake a second special fortnightly drive since March to liquidate pending refund claims made by exporters amounting to Rs 14,000 crore, the finance ministry said in a statement. The refunds include those on account of integrated GST (IGST) paid on exports, unutilised input tax credit (ITC) and other GST refunds submitted in form GST RFD-01A (for manual processing of refunds). The government admitted that refunds of GST have been a concern for the past several months. Till now, the government has sanctioned more than Rs 30,000 crore as GST refund (including those for exporters), which includes  Rs 16,000 crore of IGST and  Rs 14,000 crore of ITC, it said. The ITC part of refunds has been sanctioned by the Centre as well as states.

Denying the claims of the Federation of Indian Export Organisations (FIEO), which said on Wednesday that Rs 20,000 crore of refund claims were stuck, the government said that it was much lower at  Rs 14,000 crore (Rs 7,000 crore IGST and Rs 7,000 crore ITC). “Contrary to the press reports that there has been a dip in refund sanction after the first refund fortnight in March 2018, the refund sanctioned during May 2018 is to the tune of Rs 8,000 crore,” it said.

Further, the indirect tax department issued two circulars clarifying many of the issues plaguing the processing of refund claims. This include claims made by input service distributor, composition dealers, exports of services and supplies made to SEZ. The circular also clarifies issues related to requirement of letter of undertaking in cases of export of exempted or non-GST goods and scope of restriction imposed in the GST Act.

Similarly, another circular issued on Wednesday by the customs department said that it was 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 customs electronic data interchange (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.

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