Exporters Claimed Rs 6,500 Crore Refunds In July-October, Says Government
Errors made by exporters while filing their returns is the “sole reason” for delay, CBEC says.
The government said exporters claimed refund worth Rs 6,500 crore in the first four months of Goods and Services Tax and any delay or rejection was due to errors while filing returns.
The refunds for the Integrated Goods and Services Tax paid in July to October were granted after the exporters filed shipping bills on the GST Network, the Central Board of Excise and Customs said in a press release.
This comes after exporters said Rs 50,000 crore worth of refunds were stuck, according to a Bloomberg report. “It’s an alarming situation,” the report had quoted A Sakthivel of the Federation of Indian Exporters Organisation as saying.
The CBEC said about Rs 30 crore worth of unutilised credit was also refunded through RFD 01 A forms filed on GSTN.
The forms are filed to claim a refund of outstanding credit on taxes paid on inputs, said Abhishek Jain, indirect tax partner at EY India. It was introduced recently and all exporters may not have filed these applications, he said.
Exporters have the option to pay IGST on exports and claim a refund. Or, they can claim a refund for the taxes paid on inputs without paying the IGST at the time of exports, Jain said.
The majority of refund claims for exports made in July have been sanctioned, the CBEC said. “Refund claims of IGST paid for exports in August, September and October are also being sanctioned seamlessly wherever returns have been accurately filed,” it said.
Errors made by exporters while filing their returns is the “sole reason” for delay in grant or rejection of refunds, according to the CBEC. Incorrect shipping bill number in GST-R1, mismatch of invoice number and IGST amount paid, wrong bank account were the common mistakes, it said.
“While the substantial reason could not wrong filing of data by the exporters, the government should look into the matters when the delay is for other reasons, if at all,” Abhishek Rastogi, partner at Khaitan & Co. said in an emailed statement. He hopes that these issues are addressed pragmatically to bring the export sector back on the growth trajectory
The government advised exporters to file returns immediately, if not already done, for processing IGST refund and claiming unused credit.
Why The Discrepancy Though?
Ajay Sahai, director general of the Federation of Indian Export Organizations said that the mismatch in the refund numbers quoted by the government and the exporters can be traced back to the services sector.
“The government number is based on a figure of the merchandise sector and not of the services, while we are exporting a sizeable quantity of the value of services as well...in a few months’ time service exports would amount to $50 billion, so there will be huge funds related to the services,” said Sahai in a conversation with BloombergQuint.
A large number of exporters are yet to file refund claims, adding to the discrepancy. The government is responsive and conscious of the troubles that the exporters are facing, and are keen to find a solution, said Sahai.