A customer withdraws a stack of Indian twenty rupee banknotes (Photographer: Dhiraj Singh/Bloomberg)

Automated GST Refund For Exporters By Next Month, Says Official

Exporters of goods and services as well as suppliers to Special Economic Zone units are likely to get a Goods and Service Tax refunds automatically from June as the revenue department plans to introduce faceless scrutiny of refunds and faster claim settlement, an official said.

Under GST, every person making a claim of refund on account of 'zero-rated' supplies has two options. Either he can export without payment of integrated tax under bond/ letter of undertaking and claim a refund of accumulated Input Tax Credit or he may export on payment of integrated tax and claim refund thereof.

Currently, the facility of automatic refund is available only for those exporters who have paid Integrated GST while exporting goods. Since the GST Network systems are integrated with the Customs, refunds are generally transferred to the bank accounts of such exporters within a fortnight.

However, manufacturing exporters and suppliers to SEZ, who want to claim a refund of ITC, have to file an application in Form GST RFD-01A on the common portal and thereafter manually submit a print out of the form along with other documents to the jurisdictional officer.

Once implemented, the time period for such refunds will come down to about a fortnight from months at present.

"The revenue department and GSTN is working to make the process of seeking tax refund by all exporters faceless by next month. It would make the process faster and also help in eliminating fake refunds," an official told PTI.

GST refunds of exporters run into thousands of crores and any delay in the processing of refund claims blocks working capital of exporters.

AMRG & Associates Partner Rajat Mohan said fully computerised tax refund in case of export of services would be based on a comprehensively integrated GSTN system which connects with the Reserve Bank of India servers to track the receipt of payments and link them automatically with invoice level information.

"Tax refunds for inverted duty structure could also be copiously automated in future, however, it would require GSTN system to be loaded with HSN-enabled invoice level information by every vendor, so that only eligible tax credits could be processed without any human intercession, he added.

Also read: Finance Ministry Extends Deadline For Filing April GST Sales Returns In 14 Odisha Districts