Under GST, exporters are required to pay IGST on exports and then claim refunds. The second type of refunds to exporters under GST involve refund of GST paid on purchase of inputs
Refuting industry claims of refunds worth Rs 20,000 crore stuck under the goods and services tax (GST), the finance ministry on Wednesday said that only Rs 14,000 crore of refunds are pending with the government. The Federation of Indian Export Organisations (FIEO) on Tuesday had claimed that refund clearance has slowed and pegged pending refunds at over Rs 20,000 crore.
The finance ministry also denied the slowdown in the sanction rate for refunds to exporters, saying that Rs 8,000 crore of refunds were cleared during May. Till now, Centre and state governments have sanctioned over Rs 30,000 crore as refunds under GST, out of which Rs 16,000 crore is on account of Integrated GST (IGST) paid on exports and Rs 14,000 crore of Input Tax Credit (ITC), the ministry said in a statement.
“Refund claims to the tune of Rs 14,000 crore (Rs 7,000 crore on the IGST side and Rs 7,000 crore on account of ITC) are pending with the government as on date, as against the figure of Rs 20,000 crore projected by FIEO in the press reports,” the statement said.
Under GST, exporters are required to pay IGST on exports and then claim refunds. The second type of refunds to exporters under GST involve refund of GST paid on purchase of inputs.
The government will start a second ‘special drive refund fortnight’ from May 31-June 14 to facilitate all types of refund claims. “…Customs, central and state GST officers will strive to clear all GST refund applications received on or before April 30, 2018. This will include refunds of IGST paid on exports, refunds of unutilised ITC and all other GST refunds submitted in FORM GST RFD-01 A,” the ministry said.
In the first phase of refund fortnight observed between March 15-31, the Central Board of Indirect Taxes and Customs (CBIC) had cleared refunds totalling Rs 17,616 crore. This included Rs 9,604 crore of IGST refunds, Rs 5,510 crore ITC refund by Centre and Rs 2,502 crore ITC refund by states.
The CBIC is also implementing a solution whereby the refunds held in GSTN, in cases where the exporters have mistakenly declared their export supplies as domestic supplies, would now be transmitted to Customs EDI system. If no other errors are committed by exporters, the customs system would automatically process the refunds for sanction on receipt of the records from GSTN, the ministry said.
Besides, it has also issued circular to clarify matters related to refund claims by an input service distributor, composition dealer, exports of services and supplies made to SEZ. The government has clarified that the refund of accumulated credit of compensation cess will be granted to exporters along with the refund of accumulated credit of CGST, SGST and IGST even if the end product does not attract compensation cess. Also, the exporters of exempted or non-GST goods do not need to submit LUT or bond for exports and such exporters will also be eligible to claim refund of unutilised GST credit.
The ministry, however, said that mere online submission of refund application will not be sufficient. “All claimants may note the refund application in FORM GST RFD-01A will not be processed unless a copy of the application, along with all supporting documents, is submitted to the jurisdictional tax office,” it said. It asked all exporters with pending GST refund to approach their jurisdictional tax authority for disposal of any of their refund claims submitted on or before April 30. “In case the jurisdiction (i.e. Centre or State) has not been defined for a particular claimant, he/she can approach either of the jurisdictional tax authorities,” it said.
Ministry denies slowdown in sanction
* The finance ministry denied the slowdown in the sanction rate for refunds, saying `8,000 cr of refunds were cleared during May
* Till now, the Central and state governments have sanctioned over Rs 30,000 crore as refunds under GST, out of which Rs 16,000 crore is on account of Integrated GST paid on exports and Rs 14,000 crore of input tax credit, the ministry stated