sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« GST - Goods and Services Tax »
 Revenue shortfall may limit the scope of GST rate cuts
 No GST slab cuts if govt revenue doesn't increase
  GST annual return forms to help check tax evasion
  Government notifies new annual return form for GST
 Centre extends GSTR-1 filing date till Oct 31, announces late-fee waiver
 Foreign ecommerce companies rush to register for GST in all states
 GST can do a lot without troubling taxpayers
  Communication to the Central Excise/Service Tax Taxpayers on migration to GST
  Don’t wait for the last date, file GSTR-1, 2 and 3 within the prescribed period
 Streamlining of GST compliance fast becoming a long row to hoe
 GST is system-driven, human intervention-free regime

What is causing delay in GST refunds to exporters?
June, 06th 2018

Delayed refunds under the Goods and Services Tax (GST) continue to trouble the taxpayers as well as the government, even as exporters again raise concern over the issue. The exporters' association - the Federation of Indian Export Organisation (FIEO) - recently made an uproar about pending refunds worth Rs 20,000 crore.

After the uproar, the government has now announced Special Refund Fortnight from today. The government has also clarified that unlike what is claimed by the FIEO, the refund due is Rs 14,000 crore (Rs 7,000 Crore on the IGST side and Rs 7,000 Crore on account of input tax credit). It also said that so far it has sanctioned more than Rs 30,000 crore as GST refund. This includes an amount of Rs 16,000 crore of IGST and Rs 14,000 crore of input tax credit.

Despite the government's claim that they have been doing everything required to streamline the process, one thing is sure that the refund mechanism has not been functioning smoothly even though the GST is completing a year. What are the reasons for faltering refund system under GST? Who are at fault - the taxpayers or the authorities?

The Federation of Indian Export Organisation has listed some of the reasons for the delay in refund in a press statement. The federation says that the process of ITC refund is partly electronic and partly manual, which is cumbersome and adds to the transaction cost. It further says that the tax authorities are reluctant to accept the applications and ask for irrelevant documents. Some states have even cited lack of funds for delay in the refunds.

Tax experts cite some more reasons for the delay. The law requires that 90 per cent of the refunds claimed should be provisionally granted within seven days of submission of application, and 100 per cent should be granted in two months. Experts say that the system as laid down in the law is not at all functional.

"Authorities are not following the system of refunds as prescribed in the law. They are saying that the refund would be made once and for all," says Saloni Roy, senior director, Deloitte India.

Rajat Mohan, Partner, AMRG & Associates, says: "The law also requires the authorities to verify the basic details of the refund application and issue the applicant an acknowledgment before refund is issued within 7 days. The authorities are not issuing acknowledgment."

Saloni Roy of Deloitte India, says, the procedure of providing refund is being repeated at both the central and state authorities level, often leading to delays.

In some cases, especially exports of services, different interpretation of the formula for calculation of service exporters is also leading to delay. "The officers are interpreting the formula in such as way that the ITC refunds calculated by them are lower than claimed by exporters," says Saloni Roy of Deloitte.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Quality Assurance Services Testing and Re-testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions