Exporters are facing a tough time getting refunded their input tax credits against payment of Central Goods and Services Tax (CGST) and state GST (SGST). The Integrated GST (IGST) refunds by the Central Board of Excise and Customs (CBEC), now rechristened as the Central Board of Indirect Taxes and Customs (CBIC), have, however, been smooth so far. Currently, around Rs 10,000 crore GST input credits and IGST refunds of exporters are pending with the CBIC.
As per the Federation of Indian Export Organisations (FIEO), around Rs 10,000 crore of GST input credits of exporters are pending with the CBIC, which is causing a major liquidity problem for the exporters.
Ajay Sahai, Director General and CEO of FIEO, said: “Exporters are running from pillar-to-post for getting their GST input credits back, but the CBIC is sitting on most of these files. Around Rs 10,000 crore is yet to be refunded to exporters as their input credit claims. In case of IGST refunds, the process has become smoother. The problem lies with the GST input credit refund.”
“We demand a solely online GST refund clearance process, as opposed to the existing mix of physical and online refund process. The GST network (GSTN) is unable to auto-verify the refund claims. The manual verification takes a lot of time,” Sahai said.
“Delay in refunds creates liquidity problems, particularly for Micro, Small and Medium Enterprises (MSME) exporters, who constitute the bulk of exporters. The challenges on the GST front are continuing and exporters are the biggest sufferers of these challenges,” Sahai said.
“Recently, GSTN has improved its software to meet some of the challenges faced in clearing refunds. The induction of improved software would, let’s hope, speed up the whole GST process,” Sahai added.
Rajiv Kumar, manager of Rashmi International, an export firm based in Delhi, told The Sunday Guardian: “We filed our claims of GST input credit refund in March this year, but the CBIC is yet to clear our refund. Our chartered accountant has already visited the custom offices multiple times to get the GST refund done, but nothing has happened yet.”
Mahendra Kaushik, proprietor of Astha Enterprises, is also facing a similar problem, and said: “We have our refund claim pending since February this year; if this was the reform, then the old process was far better. Instead of improving efficiency, GST has become cumbersome. Also, at the time of the launch of the GST, it was said that the new process will remove paperwork, but surprisingly the same has increased.”
On the other hand, the CBIC officials claim that the CBIC has already speeded up the process of refunds by organising a fortnight-long refund drive. A senior CBIC official told The Sunday Guardian: “After the end of the third round of the refund drive held from 16 July to 30 July, the CBIC has already cleared 60% pendency of GST refunds.”
The first two refund drives had resulted in businesses and traders getting Rs 10,352 crore of IGST refunds cleared and Rs 2,684 crore of GST input tax credits refunded, the same official cited above said.
The Centre is taking all possible steps to make an improvement on this front. Dedicated refund cells and help desks are being placed to ease the refund
process.