Perennial snags in GSTN hit exporters

Technical glitches on the Goods and Services Tax Network (GSTN) continued to give nightmares to exporters with refunds of over Rs 20,000 crore stuck, pushing them into a cash-flow quagmire.

Corporate taxpayers also encounter painful delays in filing returns as the GST system hangs up, goes null, slows down or stubbornly refuses to take command.

Ganesh Kumar Gupta, president, The Federation of Indian Export Organisations (FIEO), told DNA Money that exporters were facing severe liquidity issues with their capital blocked in refund.

"Exporters are facing liquidity problems with their capital blocked in refund. Our members are not able to raise the fund for exports with huge amount of refund under GST (goods and services tax) still not cleared. As per the official estimate, it is Rs 20,000 crore. This has hit the overall exports of the country," he said.

A chartered accountant with a leading audit firm, who did not want to be named, also alluded to the cash crunch crisis being faced by exporters.

"There are companies (exporters) literally weeping because of their cash-flow problems. They have not got their refunds. These refunds are not in Rs 1-10 crore but they are running into thousands of crores of rupees. One company is suffocating because their refund is Rs 80 crore. They do not have money (to run their day-to-day operations). Banks have stopped credit facilities. They (banks) are saying they cannot flush any more money, in terms of bill discounting," he said.

According to him, the refunds have been stuck for the last 3-6 months. Exporters have reportedly claimed that over 60% of their refunds were currently stuck. The government has cleared refunds of around Rs 17,616 crore to exporters till March.

Gupta said the refunds have slowed down in April and May, after Rs 7,000 crore of refund was cleared between March 15 and March 31 following a government order.

"When they can refund Rs 7,000 crore from March 15 to March 31, why could they not keep the same pace in April and May? In April, it came down to Rs 1,000 crore. The government data states that the amount of pending refund to exporters, who have filed their refund claim, was to the tune of Rs 20,000 crore. This is for the period between July last year and April this year," he said.

Gupta said the issue was being faced by exporters than the local trading exporters, whose input credit tax (ITC) were offsetting the output debit.

The FIEO chief complained that the issue got aggravated in states like Uttar Pradesh, Bihar, Jharkhand, Chhattisgarh, Tamil Nadu, Andhra Pradesh and Telangana, which were not even paying ITC refund to the exporters.

Gupta said while there was nothing wrong with the new indirect tax law, it was the implementation part that left a lot to be desired. He squarely blamed the IT backbone of the newly introduced tax for the ongoing delay in refunds.

"I want to make it very clear that it is not the fault of the authority who were framing the rule. The problem is at the field level. The government's intention is very clear for refunding the money but at the ground level it is not happening," he said.

Gupta said he felt let down on the government's promise that 90% of the refund would be settled in seven days and the balance 10% in 60 days.

"When the GST was rolled out, the government had said they will refund 90% in seven days and balance 10% in 60 days. This is not coming true," he said.

A harried tax executive, who spoke to DNA Money anonymously, said meetings with officials were not yielding much with each official passing the buck to the other.

"It's a classic case of passing the parcel between officials. As you do this, two to three weeks go by and you are drained out. Then, you resign yourself to live with it. Digital transformation has a downside too. Earlier, you could meet officials and get some response but with digital transformation you have to just keep pressing refresh button repeatedly," he said.

Another tax executive, who also spoke off-the-record, said his firm has deployed more than 400 finance executives to just file monthly returns under GST as against 150 executives in the old indirect tax regime. Despite this, he said, they struggled to complete the GST return filing within the timeline.

Narrating his nightmare, a tax consultant, told DNA Money, "My guys were filling up (return) forms and saving it. After saving, they would hit the submit button. Mysteriously, when this was done, all the figures would become null or zero. Then, they would start filling up the forms all over again. This time, instead of saving, they directly submitted it. That option worked for two hours. So, we were not saving. We were filling up the data and hitting submit. But two hours later, the system started saying you have not saved the data. Then, we went back to save. This time, when we went back to save, it picked up the data of the previous month and submitted that".

Last week, the government extended the date for filing the GSTR-3B return for the month of April by two days.

When contacted by DNA Money, Prakash Kumar, CEO of GSTN, refused to comment on the issue. He said the government had already issued a statement on it.

FIEO's Gupta said the only solution to the GSTN technical snag was to further simplify forms for refund claims.

"During one of my meetings with the authorities, I asked them whether they would allow me to export if I didn't pay GST. The answer was no. So, if they are allowing me to export only if I pay the GST then they (GSTN and government) need to simplify forms for refund claims so that I can get my refund and carry on exporting," he said.

REFUNDS HARD TO COME BY

• Exporters grapple with cash-flow issue with refunds of around Rs 20,000 crore stuck; return filing turns into nightmare for corporate taxpayers
   
• Exporters have claimed that over 60% of their refunds were currently stuck
   
• In April only Rs 1,000 crore refund was cleared against Rs 7,000 crore for 15 days in March