Exporters under the goods and services tax (GST) regime are favouring the completely online system of refund of integrated GST, over the traditional method of claiming refunds of accumulated input tax credit (ITC), as the former is expedited and involves little cost despite the requirement for upfront payment of integrated GST, which can cause cash flow issues, especially for smaller exporters, experts told FE. In terms of volume of exports, the split between exporters using IGST route to ITC mechanism was 15% and 85% at the start of GST regime. This has shifted to 35% and 65% at the end of October, Ajay Sahai, DG & CEO of Federation of Indian Export Organisations (FIEO) told FE. He added that while refund of IGST was largely smooth as there was no manual intervention of tax officials required, the FIEO has petitioned the government to ensure the ITC refund mechanism is brought online entirely. Although, the original GST architecture had envisaged processing of all refund to be online, delay in the operationalisation of the refund module on the GST Network portal meant that manual processing of refunds was allowed for ITC refunds. If an exporter pays IGST on export, there is no requirement to even file an application form. The shipping bill related to exports is considered sufficient. Once the information with the customs department matches that of GSTR-1 return, the refund is processed and the amount is electronically deposited in the exporter\u2019s account. \u201cMany exporters are switching over to refund of IGST payment as the process is efficient, given refunds are credited within 15 days at the most without any cost. The trend is likely to continue with more exporters opting for this option of ITC refunds,\u201d Rajat Mohan, partner at AMRG & Associates, said. He added that in the service and excise tax regime, refund of ITC was more common as exporters were wary of paying upfront and then applying for refund. Refund of upfront payment was often fraught with legal issues, which meant that applicants seldom received the full amount. In case of ITC refunds under the GST, an exporter is required to manually submit the application form along with a host of documents to jurisdictional official. However, this process has turned out to be problematic for exporters as they have reported that a large number of applications are being halted for lack of proper documents. Additionally, jurisdictional officials have often called applicants for additional clarifications leading to delay in refund and cash flow crunch. The manual link in GST refunds has caused hardships to exporters, forcing the indirect tax department to organise dedicated refund fortnights to expedite the refund process. At the end of July, the department said it had refunded Rs 54, 378 crore cumulatively at the end of the third such fortnight.