A report released by Federation of Indian Export Organisations (FIEO) reveals that the government owes more than Rs 20,000 crore in GST refunds, of which half the amount is pending as input tax credit.
Input credit claims worth over Rs 7,000 crore were sanctioned in March month, while the cleared ITC amount in March was Rs 1,000 crore.
Commenting on the report, Ganesh Kumar Gupta, president, FIEO, said, “IGST exemptions are being made time to time which have led to instability. The exemptions should be made on a permanent basis.”
Gupta further commented that the GST refund process has been very slow ever since the introduction of GST on July 1, 2017.
In the initial months of GST, the refund of ITC for exporters was not available due to technical glitches on the common portal. However, the problem still persists even so many days after the GST launch. The major challenge in providing ITC refund to exporters is that the process of refund is partly electronic involving some manual verification, which adds to the cost and consumes more time.
It has also been reported by FIEO that the tax authorities are making irrelevant demands, such as demand for undesired bank certification and other documents, and raising objections to the applications submitted for ITC refund.
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As for IGST refund, the delay in producing proper proof of exports by airline and shipping companies to customs is causing a delay in refund clearance. Several instances of invoice number mismatch between GST returns and shipping bills have also been recorded which further cause delay in refund.
