Government sanctions GST refunds worth Rs.38,000 crore

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A statement released by the Central Board of Indirect Taxes and Customs (CBIC) on Wednesday revealed that the government has cleared GST refunds worth over Rs.38,000 crore. A large chunk of the tax refunds cleared by the government fell under the integrated GST (IGST) category for exporters on their shipping bills.

GST refunds

Following various complaints from exporters and traders regarding the pileup of tax refunds, the CBIC came up with a fortnightly tax refund clearance drive from May 31st to June 14th. This was later extended to June 16th. At the end of this refund fortnight, the government sanctioned the refunds for various pending claims.

According to the statement released by the CBIC, the total sanctioned refunds can be broken down into Rs.21,142 crore for IGST refunds, Rs.9,923 crore for RFD-01A refunds by CBIC, and Rs.6,997 crore for RFD-01A refunds by states. In addition to this, refunds for businesses seeking zero rate supplies and businesses claiming input credit were also cleared during this refund fortnight.

The government revealed last month that Rs.14,000 crore worth of GST refunds for exporters were stuck due to various mismatches in filing. During refund applications, exporters are required to file identical details with the IT department and customs department. Since the GST system is automated by the department, any mismatches in GST return forms, invoice numbers, and shipping bills will result in refunds getting stuck.

On May 30, the Federation of Indian Export Organisation stated that the government has tax liability worth Rs.20,000 crore. The statement also pointed to the technical glitches in the platform that prevented taxpayers from filing for immediate refunds. Also, the delayed submission of proofs by shipping companies contributed to the delay in issuing refunds to exporters.

The special refund drive initiated by the CBIC was mainly to fast track all the GST refunds. Yesterday, the GST Network chief stated that the compliance level of return filing is now close to 70%. An increasing number of exporters have started using the automated GST route rather than the letter of undertaking route when it comes to claiming refunds.

Source: Moneycontrol

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