The tax refund mechanism is being deeply examined by the Government and the Government laid emphasis on easing the process of refund for the exporters. They found some challenges in the refund process which is delaying the repayments. As a result of which the exporters are left with huge working capital cost and thus, they are making slow repayments. The Government is looking for some measures to get the process streamlined and thus speeding up the repayments. The next step would be shortly unveiled, said a senior official.
Finance Minister Arun Jaitley last week said that Government is deeply concerned regarding the exports and the repayments through it and thus required steps would be taken to overcome the issue.
Earlier CBIC, The Central Board of Indirect Taxes and Customs had taken several steps to get rid of the refund and repayment related challenges but still are left with some issues.
All the procedures and steps are being examined carefully along with the execution issues at the central and State level in order to remove all the related challenges of the exports. An official added that some relaxation regarding procedure is required to make refunds seamless. According to him, Those exports should not be restricted by Government that uses inputs under some exemption notification.
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State tax authorities who are unfamiliar with some export schemes are the main challenges in the context of refunding, informed the Industry representatives. They said that the State officers ask for a different set of documents and withholds the refunds even if they have been sanctioned by the Centre. This problem is especially in the service exports.
The other challenge is the change in the jurisdiction of the officers. The difference in the jurisdiction office appearing on the GSTN portal and actual jurisdiction in the Department’s record originates issues, though CBIC has instructed that no refund should be restricted due to any such issue. But still, in such cases refunds are delayed.
The taxation experts suggested that the Government should provide some new formulation to ease up the exporters’ concern regarding refunds.
The issues regarding the Integrated GST refunds have been streamlined to an extent but regarding the input tax credit is still persisting, Informed the director-general of Federation of Indian Export Organisations Ajay Sahai.
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Anita Rastogi, who is a partner at PwC said that the government is expected to formulate a solution to solve the businesses concerns.
