At a time when exporters fear that a staggering Rs 65,000 crore could get stuck in the GST refunds, the government on Friday sought to allay the concerns by assuring that there will be no blockage of funds for two-thirds of the exports.
At a time when exporters fear that a staggering Rs 65,000 crore could get stuck in the GST refunds, the government on Friday sought to allay the concerns by assuring that there will be no blockage of funds for two-thirds of the exports. The government said that the issue of the GST refund not as “grievous” as was being made out. “The issue of the GST refund to exporters not as grievous as made out…. There will be no blockage of funds on the GST refund for the two-thirds of exports,” ET Now reported citing a government official.
The exporters fear that if the GST refund of about Rs 65,000 crore does not start flowing immediately, it would get stuck and, further deteriorate their liquidity situation. The official said that the whopping amount of Rs 65,000 crore filed for returns also includes pre-GST refunds, according to the report.
The government has also addressed the issue of disruption in the working capital cycle of businesses in the initial phase by forming a GST exports panel to report on the matter, the official was cited as saying in the TV report. Meanwhile, CNBC-TV18 also reported citing an unidentified government official that exporters will soon get relief on the refunds. The refund will be made after matching the data of GSTR1 with GSTR3B, the official said.
The finance ministry has decided to refund Rs 600 crore of taxes to exporters in the next few days to help them tide over problems on account of GST implementation, PTI reported. The ministry is also working on a scheme for refund of taxes for exporters. “Rs 600 crore will be refunded in the next few days. Going forward, refunds will be given in three days. A new scheme for exporters will be placed before the GST Council on October 6,” a government official said, adding that the refund scheme will be such that it is legally tenable and financially viable.
In the first month under the GST regime the input tax credit claims filed by the taxpayers for the transitional period has been over Rs 65,000 crore, while the total tax collection for the month of July was at nearly Rs 95,000, leaving merely Rs 30,000 crore as revenue with the government.
Earlier, in the run up to the implementation of GST, the GST council had increased the availability of input credit limit from 40% to 60%, in case of goods attracting 18% or more GST. The GST regime, which kicked in from July 1, allows tax credit on stock purchased during the previous tax regime. Under this facility, one can deduct the tax that has already been paid on input from the tax payable on the output. The government gave six months to claim the input credit.