GST A Well Oiled Machine? 94 Per Cent Of The Refunds Cleared For Exporters Representative image. (Dean Mouhtaropoulos/Getty Images)

According to the finance ministry, around 94 per cent of the refunds that were due to exporters have been cleared under the GST (Goods and Services Tax) framework, as reported by Mint. Over Rs. 88,000 crore worth of refund claims have been filed with the tax dept till October-end.

“Taxes on raw material and services used in export production are refunded to keep exports competitive. ₹82,775 crore has been refunded to exporters by Union and state authorities up to the end of October. Pending claims worth ₹5,400 crore are being processed quickly to give relief to exporters,” the ministry mentioned in a statement.

Since the time GST was launched (1 July 2017), exporters have repeatedly been raising complaints of delay in refunds. Under the new tax framework, advance taxes are to be paid on materials that are used in the production of export goods. These advance taxes are later refunded to make Indian exports competitive in foreign markets. But due to delays by tax departments, the working capital (the capital used in the day-to-day operations) of the exporters was stuck in the process and this impacted their growth and profitability.

But the government has been forthcoming to solve the liquidity crisis and launched new innovative measures to help the exporters. Also, refunds to exporters are being processed faster to incentivise exporters to do more business abroad. In the coming months, govt will also launch the e-wallet scheme for exporters under which a notional credit will be transferred to exporters’ accounts and this credit could be used by them to pay input taxes, thus helping preserve the precious working capital.

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber
Advertisement