Ambiguity in refund rules hampering GST returns filing by Tirupur’s exporters

Even while the government has evinced its readiness to give IGST tax refund, a good number of exporters in Tirupur have not made an earnest attempt to file their returns, citing ambiguity in making the refund claim, admit industry insiders.

“Our understanding of the GST notifications on IGST refund has led us to believe that it would be cleared automatically through refund mechanism. But there is an anomaly in this. We have decided to approach the GST Council to request a correction,” said the President of Tirupur Exporters’ Association Raja M Shanmugham, referring to import of capital goods, where in the tax claim is not allowed by way of refund. “We learn that this cannot be set-off against inputs including raw material purchase. The IGST incidence is quite high in import of capital goods,” he added

Exporters have also expressed anxiety over not being able to make the IGST refund claim using the carry forward mechanism route.

Small exporters, who bank on auditors for help, point fingers at these professionals stating that “they ask too many questions”. Tirupur Exporters’ Association (TEA) has in the meanwhile offered to help such of those exporters who are in a fix over filing of the application for refund.

S Dhananjayan, a senior auditor told BusinessLine that exporters could either submit a letter of undertaking or bond or choose the IGST route for claiming the tax refund. A handful of exporters who chose the IGST route are understood to have received some amount by way of refund after adjusting the tax.

Yet another route is to get the Input Tax Credit (ITC) and make a matching claim. Originally, the units had to file three returns every month, but this has been suspended till March 2018. This has resulted in exporters being unable to make a matching claim on the online platform. They can, however, opt for manual processing and this involves furnishing of each and every transaction detail, Dhananjayan explained. He conceded that the exporters were reeling under immense monetary pressure due to the delay in getting the tax refund post the roll out of the GST regime.

To address their grievance, the exporters’ body had invited M Periasamy, Joint Commissioner of GST and Central Excise for an interaction. He had in the course of the meeting urged the participants to shed their inhibitions on GST for achieving compliance and getting refund of ITC at the earliest. But exporters, particularly the smaller players say that the resultant impact of GST roll out has put them in their “lowest ebb”.

The change, it appears, has not been easy, with the industry blaming the government for thrusting it on them without taking the micro economic issues into consideration

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