PMO steps in to speed up GST refunds for exporters
Taking note of slowing exports growth, the Prime
Minister’s Office (PMO) has called a meeting of key
officials from the ministries of finance and commerce to
expedite clearance of exporters’ refunds for the goods
and services tax (GST). The Department of Commerce has
strongly demanded clearance of exporters’ refunds to
address their working capital issue impacting India’s
outbound shipments. “The PMO has finally stepped in to
resolve exporters’ concerns under the GST, with the
commerce ministry and the finance ministry on different
pages on the matter. The exports should not suffer
because of administrative loopholes,” said a senior
government official.
Exporters claim only 10 per cent of refunds has
been made by the government for input tax credit and 30
per cent in case of the integrated GST (IGST). These
claims have been contested by the finance ministry.
According to the Central Board of Excise and Customs,
the nodal department for the GST implementation, 88.77
per cent of refunds have been disbursed for input-tax
credit claims. “Of the Rs 41 billion claimed under
completed applications, we have already refunded Rs 37
billion,” said a finance ministry official. |
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India’s exports growth slowed to 9.07 per cent in
January from 12.03 per cent in December. More than 6 per
cent growth was on account of petroleum products. The
labour-intensive sectors such as garments, carpets, and
handicrafts showed negative growth. “Labour-intensive
sectors are facing extreme liquidity crunch because of
funds getting blocked under the GST. Banks have also
tightened lending after the Nirav Modi case. Advance tax
and other deadlines are approaching as well,” said Ajay
Sahai, secretary general, Federation of Indian Export
Organisations.
He added a large section of micro and medium exporters
are affected, prompting them to lay off workers in some
cases. Sahai said input tax credit refund requires
manual filing. After filing applications electronically
on the GST Network portal, the credit ledger is debited
for which an exporter takes refund from the government.
That requires taking a print out and submitting it
manually to the tax authority in the jurisdiction. The
tax officer has 15 days time to acknowledge the
submission and issue provisional refund of 90 per cent
within the next seven days. After verification, the 10
per cent has to be disbursed within six months.
While the government is claiming the exporters are not
coming forward and submitting the print outs of the
filing with correct documentation, the exporters say the
authorities are refusing to accept the manual filings.
“We are issuing whatever applications are coming to us,
duly filled with documentation in place. There may be a
lack of awareness among exporters that they are not
doing the manual submission part,” said the finance
ministry official.
The exporters however pointed out that of the 104,000
online claims filed only 25,000 have been accepted by
the tax authorities. “The tax authorities are not
acknowledging applications. They are asking for a slew
of documents not even mentioned in the GST rules,”
argued an exporter. According to the rules only the
statement of exports in required. “The tax authorities
are asking for varied documents like proof of exports
realisations, for which the central bank gives nine
months, suppliers’ duty documents, etc. There is no end
to it,” he added.
Sahai said, “For the time being, they need to streamline
the refund process and to migrate to the EDI platform
over time so that the physical interface between the
exporter and the tax officer is avoided.”
The GST Council on Saturday is expected to extend the
date for IGST exemption and cess on imports for
export-oriented units and those possessing advance
authorization-licences under the Export Promotion
Capital Guarantee Scheme beyond March 31. Merchant
exporters may be allowed to continue paying the nominal
GST at the rate of 0.1 per cent for procuring goods from
domestic suppliers for exports.
Source::: Business Standard,
dated 09/03/2018
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