GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

GST Refund of Rs  20,000 Cr Pending: Exporters’ Body

Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday.

While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace.

Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitting proof of export to customs and mismatches of invoice numbers in shipping bills and GST return forms, FIEO said.

“IGST exemptions are being made time to time, which have led to instability. The exemptions should be made on a permanent basis,” said Ganesh Kumar Gupta, president, FIEO, adding the refund process has considerably slowed down after the clearance fortnight.

The apex body of exporters expects India’s exports to grow 15-20% in FY19 to USD 350 billion despite challenges on GST, increasing protectionism and credit squeeze because of rigid approach of banks. These factors have also affected employment creation.

“As a result, job creation has been dented. According to a rough estimate, every USD 1 million worth of exports creates 100 jobs. Therefore, additional exports of USD 2.7billion should have created 2.7 million jobs in exports,” Gupta said.Ajay Sahai, director general of FIEO, said growth will be driven by automobile, auto components, pharmaceutical, organic and speciality chemicals and plastic goods exports.

Rising petroleum and commodity prices would also add to export growth. The recent depreciation of Indian Rupee has helped traditional exports like handicrafts, carpets, marine products, agroprocessed products, sports goods, apparels & textiles and leather which depend primarily on domestic inputs.

The tough stand taken by banks has affected flow of credit and hence, exports. Sectors which are not doing well and require maximum support are the worst hit due to the rigid approach of the banks, FIEO said.

The Economic Times, New Delhi, 30th May 2018