Government considering clearing exporters' refunds manually

Danny Woods
September 24, 2017

After exporters raised concerns over blockage of refunds and working capital on account of rollout of goods and services tax (GST), the finance ministry has made a decision to refund Rs 600 crore of taxes paid by them in the next 15 days to provide immediate relief, a senior government official said. GSTN application for refund is also getting ready.

With exporters complaining of their working capital being blocked under the GST regime, the Finance Ministry on Friday said that it was considering ways, including manual clearance, to speed up refunds.

Tax e-filing network ClearTax said, "allowing refund based on GSTR-3B and GSTR-1 submission will ease up working capital and business issues for exporters who have had their funds locked up".

Moreover, it said that 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.

A senior finance ministry official said the amount stuck is about Rs 600 crore. The Committee also interacted with the exporters of eight sectors who made detailed presentations on the problems being faced by them. This is available up to six months from July.

Keen to revive the economic growth rate that slowed to 5.7% in the June quarter from 6.1% in the preceding three months, the government is open to extending all support to exporters.

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The government also allayed concerns over reports that taxpayers have claimed Rs 65,000 crore of tax credit for central excise and services in pre-GST period and government revenues will take a hit.

"About Rs 600 crore will be refunded in the next few days".

The State government will have to source about Rs. 1,750 crore by October 1 to clear the second instalment of the enhanced salary and pension arrears due to about five-lakh employees and 3.5 lakh service pensioners as per the Tenth Pay Commission recommendations.

"Firstly, Rs 65,000 crore is the credit claimed by the taxpayers in the TRANS 1 form as their balance of credit". They may have claimed correctly also but according to their understanding. However, a government notification, which came after that, stated that the original filing is allowed only till 28th September and revisions to the original filing will be allowed till October 31st.

"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", the Finance Ministry said in a statement.

Also, some of the credits, which are claimed in TRAN-1 form may be under litigation and therefore, may not be available to the assessee to carry forward or for utilisation.

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