Exporters have been facing working capital constraints due to delay in refunds related to Integrated GST and Input Tax Credit
In a major relief, exporters will receive Rs 18,000 crore of pending refunds starting Thursday. The government has decided to set up camps for a fortnight, beginning March 15 across the country to ease refund problems faced by the exporters.
On Monday, the Prime Minister's Office (PMO) held a meeting with the top finance and commerce ministry officials to iron out problems related to refunds. The finance ministry officials presented the action plan to the PMO, sources said. In the meeting, it was also decided to ask the states to hold similar camps, sources said.
Exporters have been facing working capital constraints due to delay in refunds related to Integrated GST (IGST) and Input Tax Credit (ITC).
Multinationals like Ford India and Nissan are among the companies whose claims have been rejected.
Refunds to the tune of Rs 18,000 crore are pending, mainly on account of mismatch of information provided by the exporters, sources said. There are discrepancies in the forms submitted by exporters to the Customs department and those with the GST Network (GSTN), revenue department, sources said, adding that in some cases the two sets of information don't match. In such scenario, how can the system release refunds, they asked.
Even some multinational companies have made errors while filing refund claims, revealed another source. Ford India and Nissan together account for the Rs 1,000 worth of the pending claims. The claims of the two firms reportedly got rejected as they had erroneously filed it in dollars while they should have calculated in rupees. Then there are some exporters which have claimed refunds twice, once under the composite duty drawback scheme and again under the IGST.
However, most refunds claimed using correct processes have been cleared, sources said. So far, the government has paid Rs 10,093 crore to the exporters on account of both integrated GST and input tax credit. This includes Rs 4,974 crore under IGST and Rs 5,119 crore under ITC.
During the camps, the government will help exporters make corrections with some manual intervention at the camp sites. It will be supervised by the chief commissioners who have been made in-charge. They will supervise the refunds on account of both GST and customs on day-to-day basis.
The camps will be held at the field offices of the Central Board of Excise and Customs (CBEC), the nodal department for GST implementation all over the country. The exporters can come with refund problems and explain their problem. The officials will rectify it and then refund will be released, the source said.
Reacting to the decision, Federation of Indian Export Organisations (FIEO) DG Ajay Sahai, said, "We welcome the decision. This will reduce the liquidity crunch that exporters are facing due to delay in the refunds."
The issue of refunds is pending for over last five months with exporters complaining that the delay in releasing the GST refunds has blocked their working capital, impacting shipments. The commerce ministry has flagged concerns demanding immediate clearance of exporters' refunds arguing that the working capital issue is impacting shipments.
The country's export growth slowed to 9.07% in January from 12.03% in December.
SOME RELIEF
- Exporters have been facing working capital constraints due to delay in refunds related to Integrated GST and Input Tax Credit
- There are discrepancies in the forms submitted by exporters to the Customs department and those with the GST Network, revenue department
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