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Exporters can expect faster refunds as govt tweaks rules

Exporters can expect faster refunds as govt tweaks rules

Exporters can expect faster refunds as govt tweaks rules

Alarmed by massive slump in exports of garments and other items, the government has allowed exporters to file claims for refunds manually with the concerned indirect tax officials.

The move is set to ease the pains of exporters who have been facing liquidity problems due to delay in refunds of taxes. The delay has considerably limited their ability to compete with rivals.

With permission to claim refunds manually, exporters of services, who paid IGST and those making zero-rated supplies to SEZ units as well as those merchant exporters wanting to claim refunds for input credit, can approach their jurisdictional commissioner with their refund form.

“Due to the non-availability of the refund module on the common portal, it has been decided by the competent authority...  That the applications/documents/forms pertaining to refund claims on account of zero-rated supplies shall be filed and processed manually till further orders,” the Central Board of Excise and Customs (CBEC) said in a circular.

While the overall export numbers fell in October, garments have been the worst-affected. Industry players see the declining trend to continue in the coming months if issues around the GST are not sorted out at the earliest. The sector may even lose peak season orders.

Readymade garment exports have declined 39.23 per cent to $829.44 million in October 2017 against $1,364.95 million in the corresponding month of 2016. Between April and October, exports are marginally up by 2 per cent against the same period last year.

“October to January is the peak season for exports and India may lose 20-25 per cent of its shipments if the issues around GST and refunds are not sorted out. Though we hope that things will get normalised soon, exporters are downsizing their commitments and the orders for the coming months have shrunk,” said Chandrima Chatterjee, adviser, Apparel Export Promotion Council.

The CBEC had last month started refunds for exporters of goods who paid Integrated GST (IGST) and claimed refund based on shipping bill by filling up Table 6A. Now businesses making zero-rated supplies or those who have paid IGST on exports or want to claim input credit will have to fill Form RFD-01A and approach chief commissioner of central tax and the commissioner of state tax for refund claim.

Paying GST upfront has blocked capital of exporters, which would be at an average 8 per cent of the total exports. Exporters have to pay 5-11 per cent GST on the freight on board rate, depending upon the quantum of imports made.

The duty drawback rates too have been reduced to 3 per cent from 11 per cent during pre-GST times, which includes 7.5 per cent drawback without input tax credits and 3.5 per cent of RoSL (rebate on state levies). The refunds too are getting delayed.

“Exporters could not take advantage of the positive trend in global trade due to serious cash crunch. Irrespective of the best effort of the department to disburse refund claims due to system issues, majority of the cases of refund claims could not be settled,” said A Shaktivel, regional chairman, Federation of Indian Export Organisations and former chairman of Apparel Export Promotion Council.

GST Council can refund input tax on export products from July to October and in case the system is not ready, the refund may be provided based on the claim by the exporters.

Source:- Mydigitalfc.com

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