Govt to ensure timely refund of GST dues to exporters

23 Sep 2017

The Finance Ministry on Friday said it was working to ensure timely refund of taxes for exporters under the Goods and Services Tax (GST) regime, even if it has to intervene manually.

Finance ministry also clarified that the refund for inputs in case of exports under GST can be made available even before the filing of regular form GSTR 3.

''We are trying to find a way of giving refund by linking form GSTR 1 with form GSTR 3B and, therefore, for the month of July, where form GSTR 1 is already filed, the authorities would be in a position to process the refund applications.'

It has now advised the exporters, who have not yet filed form GSTR 1 for July 2017, to file it immediately and not to wait till the deadline.

''GSTN application for refund is also getting ready. But, in the meantime, we are also finding other ways of giving refund, if necessary through a manual procedure,'' the ministry stated.

The government is looking to find a way to give refunds by linking GSTR 1 with GSTR 3B forms. ''Exporters who have not yet filed form GSTR 1 for July 2017 may be advised to file it immediately and not wait till the deadline,'' it said.

But to give immediate relief to exporters, the government has also asked tax officials of the States and the Centre to expeditiously clear the pre-GST refund claims of Central excise and value-added tax.

The finance ministry also refuted concerns that a large part of the working capital of exporters had been blocked under the GST due to delay in refunds. The ministry said there are various figures being discussed on the blockage of such funds, which are wild estimates and are not based on facts.

According to the ministry, in respect of 66 per cent value of exports, exporters have preferred the duty drawback scheme instead of taking actual refund of input taxes in the pre-GST regime. Duty drawback scheme was actually extended in the post-GST regime for a period of 3 months, ie, up to 30 September 2017, subject to that exporter not taking input tax credit under GST. This means that as of now, for 66 per cent of the value of exports, there is no blockage of funds, it added.

The remaining 33 per cent of exporters always used to prefer a normal refund route for taxes paid on inputs for central excise separately and for VAT separately and that was made available to them only after the actual exports took place. For such class of exporters there is a normal blockage of funds for a period of 5 – 6 months at least except for those using facility of advance authorisation, the ministry pointed out.

The ministry said the Committee on Exports led by Revenue Secretary Hasmukh Adhia met exporters from eight sectors earlier this week to discuss ways to address their problems under GST.

The meeting of the GST Council has also been advanced to 6 October to work out more measures for exporters.