GST payers await Rs 1.5 lakh cr refund

More than six months after goods and services tax (GST) was implemented, businessmen are still waiting for input tax credit refunds. 

Exporters are among the worst affected lot as a whopping Rs 1, 50,000 crore worth of tax refunds are yet to be released.

At the time of GST implementation, the government had made a provision of refund on excise duty and VAT paid on the final stock in inventory up to June 30. For the excisable goods and VAT shown in the bill, the formula was to refund tax on 40 or 60 percent of the value.

However, the online refund system is still facing teething problems. Despite instructions from the government for timely refund, both the exporters and tax payers have been facing trouble in getting online refunds forcing the government to allow offline filing of GST return. Still, the situation is out of control. The Rs 1.50 lakh crore refund claims created panic in the government.

According to reports, to bring down refund claims, the CBEC is now adopting a process of verification. Physical verification is being done on a short notice. It is being alleged that some big companies have received refunds but they have not extended the benefit to the customers. Industry and trade organisations have been protesting this and even complained but no one is paying heed.

At the time of launching GST, the government had claimed that the entire system would be online and tax officials would not visit tax payers to avoid corruption but the physical verification of final stock inventory is a contradiction to this claim.

“Tax payers are being sent notices for physical verification. This is wrong and the possibility of corruption cannot be ruled out. To maintain transparency, representatives from trade and industry organisations must be taken in the loop,” Suresh Agarwal, president, Rajasthan Federation of Trade and Industries said.

LOOPHOLES

• According to reports, to bring down refund claims, the CBEC is now adopting a process of verification 
• Physical verification is being done on a short notice 
• It is being alleged that some big companies received refunds but have not extended the benefit to the customers