Providing a sigh of relief to exporters, the centre announced to pay the input tax credit (ITC) refunds of state taxes which will translate into lesser transaction time and costs. while the manual interface is being said under processing.
As the industry claims, there is a huge difference between the amount claimed for ITC to amount sanction amount for state goods and services tax (SGST) from central tax authority to the amount actually payout.
As proposed in the 2019-20 budget, “The central government has been authorised to pay the amount of refund towards state taxes to the taxpayers”. Till now, the central tax officer received claim filing for a refund, was responsible for payment of half of the amount and later the file passed to the state tax authorities for sanctioning of the remaining amount which leads to more time-consuming in refund claim and sanction process.
Not even this, the partly electronic and partly manual nature of ITC claim process also makes it time-consuming for the exporters. They have to file refund application at the portal and further to provide its printout along with acknowledgement and necessary documents in hard copy to the GST authorities. The documents set also vary from authorities to authorities. This manual interface of ITC return claim results increases transaction time and cost.
Mr Ajay Sahai, director general at Federation of Indian Export Organisations said, “The states and Centre did their own respective approval of ITC refund but now only one will approve both. This is a relief for exporters as it would reduce transaction time and costs”.
Centre granted relaxation for exporters who have to combat with stringent credit norms amid slow pace global trade growth. In December 2018, sanctioned export credit amount to exporters was accounted INR 7.38 lakh crore, translates into a fall of 20% on Year on Year basis. The PSU banks’ share in amount sanctioned as export credit has been reduced from 65% in FY 16 to 45% in FY 18.
Read Also: Latest GST Updates and News for the Indian Exporters
In addition to this, exporters revealed a huge difference in the number of filed refund application on the portal and processed to the state tax office.
As per a tax expert, “The ability for Centre to give the refund for both the CGST and SGST will ease the problems being faced currently especially by the exporters and remove the delay in getting the entire cash post the sanction of refunds”.
