Looking at ways to ensure timely refund of taxes: Finance Ministry

Committee is trying to find a way of giving refund by linking GSTR 1 with GSTR 3B forms.

New Delhi: The committee on exports set up by the GST Council is looking at ways to ensure timely refund of taxes, if necessary through manual procedure, the finance ministry said on Friday.

It has also asked states as well as central government authorities to expeditiously clear the pre-GST refund claims of central excise and VAT, "so that the exporters will get immediate relief".

Regarding the refund under the Goods and Services Tax regime, the ministry said in a statement that the committee is trying to find a way of giving refund by linking GSTR 1 with GSTR 3B forms.

While GSTR-3B is the initial simplified return which businesses have to file, GSTR-1 is the final sales return to be filed every month. For July, where GSTR 1 form has been already filed by businesses, it said the authorities would be in a position to process the refund applications.

"Therefore, the exporters, who have not yet filed form GSTR 1 for July, may be advised to file it immediately and not to wait till the deadline," the ministry said, adding that GSTN application for refund is also getting ready.

It said the committee is also finding other ways of giving refunds, "if necessary through a manual procedure".

It said lot of people are speculating that refund for inputs in case of exports under GST will be available only when regular form GSTR 3 is filed for every month, but "this is not the case".

The committee have discussed various methods of resolving the issue of blockage of funds for the exporters. Earlier this week, it had interacted with the exporters of eight sectors who made detailed presentations on the problems being faced by them.

The committee, it said, would present the solution to the problems before the GST Council as soon as possible. It also allayed the apprehensions expressed in the media about the problem of blockage of working capital for exporters post-GST.

"There are various figures also being discussed on the blockage of such funds, which are wild estimates. Such media reports are not based on facts," it added.

It said in respect of 66 per cent value of overseas shipments, exporters have preferred the duty drawback scheme instead of taking actual refund of input taxes in the pre-GST regime.

Duty drawback scheme was actually extended in the post- GST regime for a period of 3 months upto September 30 this year, subject to that exporter not taking input tax credit under the new indirect tax regime.

"This means that as of now, for 66 per cent of the value of exports, there is no blockage of funds," it said.

The remaining 33 per cent of exporters, it said, used to get refund after the actual exports which entailed a delay of 5-6 months.

"Hence, the problem is not as grievous as it is made out to be. Notwithstanding this, the Committee on Exports is working on issues of export sector," it said.

Demanding timely refund of taxes, Federation of Indian Export Organisations (FIEO) has stated that about Rs 60,000 crore to Rs 65,000 crore could get stuck in GST refunds by the end of October.

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