Exporters still struggling to get GST refunds

Commerce Secretary, CBEC Chairperson ask officials to expedite disbursals


Exporters are continuing to struggle to get their refunds for the Integrated Goods & Services Tax (IGST) paid on exports, with officials raising various issues over the required documentation in the absence of a checklist.

With just about 30 per cent of the claims for refunds met so far by the government, Commerce Secretary Rita Teaotia expressed her concern on the delayed payments at a recent meeting of the National Committee on Trade Facilitation, which was chaired by the Cabinet Secretary.

“The Commerce Secretary pointed out that there was a need to sensitise States on expediting refunds to exporters as a large amount of their working capital was stuck in the process,” a government official told BusinessLine. Exporters point out that in the absence of a prescribed set of documents, different officials, including State authorities, were asking for whatever documents they fancied, such as bank realisation certificates, and were rejecting claims if such documents were not available with exporters.

“The government needs to streamline the required procedures and give a checklist of documents that are required. Everyone, including State authorities, should be made to accept the checklist and no other documents should be demanded,” said Ajay Sahai from the Federation of Indian Export Organisations.


As much as 1,85,000 crore could get stuck with the government because of the present system, under which exporters pay duties first and then get refunds, according to industry estimates. The government plans to introducethe e-wallet system to help exporters get around the situation from April, but exporters say that the details of how it would work have not yet been shared.

The Central Board of Excise and Customs has also asked its officials to speed up work on refunds to exporters. In a recent missive, CBEC Chairperson Vanaja N Sarna has asked Chief Commissioners to monitor the processing of pending claims and to set up a dedicated team of officials for timely disbursals.

States’ concern

“States are also now getting concerned about the delay in refunds and some have said they will raise the issue at the GST Council. State tax departments are setting up teams to look into timely refunds,” said a Finance Ministry official.

Under GST, which was launched on July 1 last year, exporters have to pay Integrated GST for exports, which is then refunded. But as this can lead to cash flow problems, exporters had the option to provide an LUT or bond.

The state of Input Tax Credit (ITC) refund – the money paid as GST on buying of inputs – is even worse, as exporters have only been able to carry out 5 per cent of the filing done electronically in the manual format, Sahai added.

“There is a huge gap between electronic filing and manual filing and we believe that the Revenue Department is taking up the issue with the GST Council,” he said.

Due to the non-availability of the refund module on the common portal, the CBEC decided two months back to allow applications, documents and forms pertaining to refund claims on account of inverted duty structure, deemed exports and excess balance in electronic cash ledger to be filed and processed manually.

“Manual filing takes time and effort and adds to the cost of transaction,” said Sahai.


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