Sunday, 17 December, 2017

Govt to ensure timely refund of GST dues to exporters

Govt to ensure timely refund of GST dues to exporters Govt to ensure timely refund of GST dues to exporters
Stacy Diaz | 24 September, 2017, 00:45

After exporters raised concerns over blockage of refunds and working capital on account of rollout of goods and services tax (GST), the finance ministry has made a decision to refund Rs 600 crore of taxes paid by them in the next 15 days to provide immediate relief, a senior government official said. "It is working on issues of exports sector and would present the solution to their problems before the GST Council as soon as possible", the statement said. If necessary, refunds will be processed through a manual procedure, added the statement. The Goods and Services Tax (GST) regime, which kicked in on July 1, allows tax credit on stock purchased during the previous tax regime.

The government said that the problem of blockage of working capital is not as grievous as it is made out to be as the remaining 33 per cent of exporters always used to prefer a normal refund route for taxes paid on inputs for central excise separately and for VAT separately and that was made available to them only after the actual exports took place. "A new scheme for exporters will be placed before the GST Council on October 6", the official said.

"Out of the IGST paid for the month of July, around Rs 600 crore will be refunded to exporters within the next fifteen days".

"It may be clarified that an amount of Rs95,000 crore, which was received in the month of August 2017 for GST, is the amount actually paid in cash other than availing credit", the ministry clarified, rejecting the idea that rebate claims have eaten into July tax proceeds. The official cited above said that the government is confident of meeting the tax revenue target for the year and there is no need to panic.

A close scrutiny has brought down the valid claims to Rs 12,000 crore, a finance ministry official said.

The State government will have to source about Rs. 1,750 crore by October 1 to clear the second instalment of the enhanced salary and pension arrears due to about five-lakh employees and 3.5 lakh service pensioners as per the Tenth Pay Commission recommendations. They may have claimed correctly also but according to their understanding. Also, the ministry noted, some assessees would have committed mistakes in filing TRANS 1 form of admissible credit.

Also, some of the credits, which are claimed in TRAN-1 form may be under litigation and therefore, it may not be available to the assessee to carry forward or for utilisation.

Clarifing to it, Ministry said, "Some people are under the impression that because of Rs. 65,000 crore claimed as transition credit, the income of Government this month has plummeted". "Exporters who have not yet filed form GSTR 1 for July 2017 may be advised to file it immediately and not wait till the deadline, " it said.