The Central Board of Indirect Taxes and Customs (CBIC) has sanctioned refunds worth Rs 2,500 crore to the exporters in the second edition of ‘special refund fortnight’ that commenced from May 31, a senior government official said. The amount sanctioned so far is almost 18 per cent of the total Rs 14,000 crore of pending refunds estimated by the government.
“In the first five days of the special refund fortnight, we have cleared about Rs 2,500 crore of refunds to exporters. All the GST commissionerates are working towards expeditious clearance of the refunds,” the official said.
Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta said that even though the exporters are still facing mismatch issues in their refund claims, but all commissionerates are working towards payment of both types of refunds for Integrated GST (IGST) and input tax credit (ITC) to the exporters. He, however, pointed out that the states have not been “aggressive” in the disbursal of their share of refunds on the input tax credit side.
“The exporters are still facing some mismatch issues but all the GST commissionerates have been very active in resolving issues. I have got reports especially about Gujarat commissionerate reaching out to exporters in Ahmedabad, Rajkot and Surat. There is very fast resolution of issues and has been a good response so far,” Gupta said.
The only issue in the refund drive is being faced by small exporters for getting their refunds for GST paid on inputs. “The IGST refund is being handled by Customs, the ITC refunds are being done broadly by Centre but for small exporters, the ITC refunds are being handled by states. Maharashtra is doing fine but other states are not being aggressive in refunding the states’ portion of ITC refunds,” he said.
Under GST, exporters are required to pay IGST on exports and then claim refunds. The second type of refunds to exporters under GST involve refund of GST paid on purchase of inputs. For refund of IGST paid on exports, the exporters are required to file GSTR 3 B and table 6A of GSTR 1 on the GSTN portal and shipping bills on the customs EDI (electronic data interchange) system. For refund of the unutilised input tax credit on inputs used in making exports, the exporters are required to file Form GST RFD- 01A on the GST portal.
Last week, FIEO had claimed that refund clearance has slowed and had pegged pending refunds at over Rs 20,000 crore, a claim which was refuted by Finance Ministry. The Finance Ministry had said that only Rs 14,000 crore of refund claims (Rs 7,000 crore on the IGST side and Rs 7,000 crore on account of ITC) are pending with the government.
Earlier, incomplete details in refund claims and mismatch errors by exporters had created a hurdle in processing the refund amount for exporters. In the first refund fortnight, the government had mainly focused on clearing IGST refunds, but the second ‘special drive refund fortnight’ from May 31-June 14 was started to facilitate all types of refund claims. In the first phase of refund fortnight observed between March 15-31, the CBIC had cleared refunds totalling Rs 17,616 crore. This included Rs 9,604 crore of IGST refunds, Rs 5,510 crore ITC refund by Centre and Rs 2,502 crore ITC refund by states.