The revenue department has come with a new step to facilitate the GST refunds to the Exporters and suppliers of goods and services to SEZ units. For this, they have automated the process to quicken the refund accompanied with accuracy. Now there will be no personal interaction as the whole process of claim settlement has been digitalized by the revenue department.
“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 officer said.
GST system gives two options to every exporter claiming a refund for ‘zero-rated’ supplies. The first option allows the exporter to export without paying integrated tax under Bond/ LUT and claim an accumulated Input Tax Credit (ITC) while in the second option the exporter may export on payment of integrated tax and so claim the refund.
At present, the facility of automatic refund is exclusively for the exporters who opted for the second options means who have paid Integrated Goods and Services Tax (IGST) while exporting goods. As the GST Network (GSTN) systems are interconnected with Customs, the refunds will directly be credited to the bank accounts of such exporters within a period of two weeks.
Automated GST refunds will begin from June. Although the digitalised processes results in effortlessness and timeliness for everyone but initially it requires proper registration and submission of important documents so all the exporters and suppliers to SEZ, who wish to claim an ITC refund, will need to file an application via Form GST RFD-01A on the common portal followed by manual submission of hard copy of form to the jurisdictional officer. In addition to the print out of the form, an exporter will have to submit other relevant documents as well.
After the implementation, the refund process will come become fully automatic and easy and the time period for a refund will be abbreviated to the period of two weeks, unlike months in the current period of time.
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Automated refunds will consequence the on-time payment of refunds which will further maintain the availability and flow of working capitals for the exporters as the value of GST refunds of exporters sway into thousands of crores and time taking refund processes obstructs their working capital. It will also knock out the bogus refund claims.
In the words of Rajat Mohan, Partner in AMRG & Associates fully computerized tax refund to exporters would be based on a fully integrated GSTN system which hooks up with RBI servers to record the receipt of payments and auto-link them 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 further added.
