Tax officials begins clearing pending refunds of IGST to exporters

NEW DELHI : In some relief to exporters, tax officials have begun clearing pending refunds of Integrated Goods and Services Tax (IGST), albeit at a slow pace.

According to official data, of the total IGST claim of Rs. 753 crore in July, only Rs. 132 crore were sanctioned for refund in the first 10 days.

The slow pace of IGST refunds is significant given that the GST Council, in its last meeting, had announced that all pending refunds for July and August would be cleared at the earliest — those for July would start by October 10 and for August by October 18. The issue has now been raised by the Finance Ministry as well as exporters, who have urged tax officials to expedite refunds.

“The Board is according utmost priority to the early sanction of the remaining export claims,” said Vanaja N Sarna, Chairperson, Central Board of Excise and Customs, in a recent letter to field formations, stressing that these must be cleared at the earliest. The matter is also understood to have been taken up by Revenue Secretary Hasmukh Adhia in a recent review meeting with officials.

Adhia had earlier this month said that pending refunds to exporters would be cleared by November-end. About Rs. 67,000 crore has been collected as IGST from which refunds to exporters are estimated at about Rs. 2,000 crore for July and August.

According to Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations: “The refunds are on the lower side of our estimates. We hope that all refunds for July and August will be cleared by the end of this month.” Though there is no GST on exports, exporters have to pay IGST, which is refunded.

However, refunds were initially stalled due to procedural confusion, and exporters complained they were facing cash-flow problems. After a series of measures by the CBEC, a committee led by the Revenue Secretary also recommended some measures to the GST Council. Accordingly, the Council, in its meeting on October 6, relaxed norms for exporters.

Source: Dailyshippingtimes.com