With exporters’ refunds continuing to be a sticking point under the goods and services tax (GST) regime, the Centre will launch the second edition of ‘special refund fortnight’ from May 31 to fast track refund payments. While government officials estimated the pending amount of refunds to be about Rs 9,000-10,000 crore, industry body Federation of Indian Export Organisations (FIEO) has pegged the amount to be a much higher Rs 20,000 crore.
During this 15-day special drive, the government will initiate refunds for both Integrated GST (IGST) paid on exports and GST paid on inputs. “The endeavour is to clear all refunds this time. The last fortnight had primarily focussed on clearing refunds of IGST paid on exports but this time, all refunds are likely to be cleared,” a senior government official said.
Detailing the breakup of the pending refunds, another government official said that refunds worth Rs 7,000 crore of IGST paid on exports were awaiting clearance as of March 31 and about Rs 2,000-3,000 crore was stuck as refunds as GST paid on inputs, another government official said.
Earlier on Tuesday, FIEO President Ganesh Kumar Gupta said: “While claims of over Rs 7,000 crore were cleared during March 2018, the amount in April 2018 is little over Rs 1,000 crore. As per our estimate, refund over Rs 20,000 crore are pending on account of IGST and Input Tax Credit (ITC) and many exporters have not been able to file the refund of ITC due to technical glitches as input tax credit and exports happened in different months. The GST refund process has considerably slowed down after the clearance fortnight.”
Centre and state GST officers aim to clear all GST refund applications received on or before April 30 during the ‘special refund fortnight’ from May 31-June 14, as per tweets from the government’s official Twitter handle related to GST queries.
The government also said that the refund application in FORM GST RFD-01A will not be processed unless a copy of the application is submitted to the jurisdictional tax office along with supporting documents. “Mere online submission is not enough,” it said.
In March, the Prime Minister’s Office had called a meeting of officials of commerce and finance ministries to discuss the issue of GST refunds as exporters had claimed that 70 per cent of their refunds were still stuck even after eight months of roll out of the new indirect tax regime. Subsequently, the Central Board of Indirect Taxes and Customs (CBIC) had launched a nationwide Refund Sanction Fortnight from March 15-29 (later extended till March 31) during which a total of Rs 17,616 crore of refunds were cleared by the government. 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.
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.