Rs 8,000 crore of IGST refunds, Rs 15,000 crore ITC repayments stuck, says FIEO
GST refund claims of Rs 54,378 crore of exporters have been cleared by the centre and state tax officials till July end.
“Refund of IGST worth Rs 8,000 crore and ITC worth Rs 15,000 crore are yet to be paid to exporters and it is causing a liquidity problem,”said Ganesh Kumar Gupta, FIEO president and urged the government to organise another GST refund clearance fortnight.
GST refund claims of Rs 54,378 crore of exporters have been cleared by the centre and state tax officials till July end. As of July 31, 2018, the total amount of IGST refund claims disposed was Rs 29,829 crore, taking the disposal rate to 93%.
He explained that though the refund process has improved in the last six months, the actual refund can only be claimed after manufacturing of goods and exports with a lead time of about 3-9 months depending on the production cycle.
At present, ITC refund is partly electronic and partly manual. The exporter files refund application at the portal, takes a print out along with acknowledgement and carries it to GST authorities in hard copy along with required documents which too varies from authorities to authorities. The physical interface adds to the transaction time and cost and best be avoided.
FIEO said the GST network may be asked to develop a complete electronic data interchange for processing the ITC refund as has been done for IGST refund to avoid human intervention in the process.
Another immediate concern of the export sector is with regard to flow of credit from the banking sector as getting renewal of limits is taking abnormal time with huge documentation requirement, according to Gupta.
India’s exports grew 9.7% to $302.84 billion in 2017-18 and in the April-August 2017-18 period, exports rose 16%.
Gupta said the growth could be above 20% if refunds are made timely.
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