Fieo Archives | XaTTaX GST Blog

GST refunds worth Rs 22,000 cr pending with govt: FIEO

October 11, 2018 admin Comments 2 comments

As much as Rs 22,000 crore GST refund is pending with the government, creating a liquidity problem for exporters and impacting overseas shipments, FIEO said.

Federation of Indian Export Organisations (FIEO) President Ganesh Gupta said the delay in refund is mainly impacting small exporters who provide jobs in labor-intensive sectors.

“Refunds of about Rs 7,000 crore are pending on account of IGST (integrated GST) and about Rs 15,000 crore ITC (input tax credit) as of September 30. This is impacting small exporters,” Gupta told reporters.

He said that liquidity is a major area of concern particularly for MSME exporters who constitute the bulk of exports in employment-intensive sectors.

While refund process has improved in the last six months, the refund can be claimed only after manufacturing of goods and exports with a lead time of about three-nine months depending on the production cycle, he added.

He demanded that exemption from GST should be provided on inputs required for export production to provide the necessary competitiveness to exports.

“At present, ITC refund is partly electronic and partly manual. The exporter files refund application at the portal takes a printout along with acknowledgment and carries it to GST authorities in hard copy along with required documents which to varies from authority to authority,” Gupta said.

Talking about credit woes, he said the cost of exports has increased by about 5-6 percent and the big exporters are now using letters of credit (LCs) in place of letters of undertaking.

“The immediate concern of the export sector is with regard to the flow of credit from the banking sector. Even getting a renewal of limits is taking abnormal time with huge documentation requirement. The export credit declined by 26.4 percent in the financial year ending March 2018,” he said. Technically, export credit is under the priority sector lending but through a complex mechanism, he said, adding the cost of credit is also an issue as interest rates are moving northward.

On rupee, Gupta said the limited intervention by the RBI has not been able to contain the volatility as it is a global phenomenon.

The rising crude prices, northward movement of Fed rates in the US, pullout by FIIs and increasing current account deficit which is expected to touch 3 percent of GDP as estimated by the IMF are bound to put pressure on the rupee, he said.

“Contrary to general perception, such depreciation has not benefited exports to the extent anticipated,” he said.

Further, he said the federation has suggested a barter system trade with Iran.

He has suggested setting off/adjustment of export receivables against import payable from the same entity in Iran.

“Though the RBI guidelines allow such transactions, which are also recognized in the Foreign Trade Policy, banks are not clear whether this facility is applicable for exports/imports to/from Iran,” he said.

GST Ready Invoicing Software – Generate GST Compliant Invoice

Source : Moneycontrol

GST refunds to exporters top Rs 12,000 crore, only 40% payment left

June 19, 2018 admin Comments 0 Comment

The second round of the dedicated period for clearing refund overdue of exporters under the Goods and Services Tax (GST) regime may have seen Rs 12,000 crore settled by the government.

Ganesh Kumar Gupta, president of Federation of Indian Exporters Organisation (FIEO), told DNA Money that the exporters’ body has estimated that around Rs 12,000 crore of the Rs 20,000 crore pending refund had been cleared in the second round of refund fortnight – May 31 to June 14 – which was extended by two days to June 16. This works out to 60% of the exporters’ refund overdue.

“Close to Rs 12,000 crore refund of exporters out of the Rs 20,000 crore has been settled during this period. This is a good number because in April they (government) refunded Rs 1,000 crore. In May, they refunded, according to government estimates, around Rs 8,000 crore. So, if they have refunded around Rs 12,000 crore in 15 days (17 days), I would say it’s a very good number,” said the FIEO chief.

This is over 70% of the amount cleared during the refund fortnight of March. The Central Board of Indirect Taxes and Customs (CBIC) had cleared Rs 7,000 crore then. According to official data released recently by the government, GST refund sanctioned to exporters till now was Rs 30,000 crore.

Gupta said the FIEO would request the government for another refund fortnight; “we will ask them (government) for another refund fortnight”.

Vanaja Sarna, chairperson of CBIC – erstwhile Central Board of Excise and Customs (CBEC) – could not confirm FIEO’s figure as the tax authority was still in the process of collating the information collected by it.

“We will be putting out a press release tomorrow in which we will be giving the details. The refund fortnight has just finished on Saturday and we are collecting information from our field. I don’t want to put out any wrong figure,” she said.

Also Read: GST leads to formalisation of an economy, widening of tax base, says govt

Asked if CBIC’s number could be anywhere closer to the FIEO’s, she did not want to make a guess; “I can’t really tell you because I am looking at IGST (interstate GST) and ITC (input tax credit) refund. In ITC, I am looking at Centre and state numbers, so I have to have complete figures from states before I give it. Let it come and you will know tomorrow,” said the CBIC head.

Interestingly, there is a controversy over the amount of pending export refund. The government maintains it is around Rs 14,000 crore while the FIEO claims it was close to Rs 20,000 crore.

Amit Mitra, West Bengal finance minister and former chairman of the empowered committee on GST, on Monday put the number at around Rs 25,000 crore.

Despite the piling up backlog of exporters’ refund, Gupta appreciated the effort put in by the commissionerate of CBIC in trying to settle as much refund as possible during the 17-day period.

“All the commissionerate co-operated in clearing the refund backlog. The bureaucracy has really done a good job. I should not always crib. I should not always criticise. If there is something good, I must say that also. The bureaucracy really co-operated in resolving the issues and problems of exporters,” he said.

The FIEO functionary, however, felt that some snags in the export refunding process at the state level still remained; “there is still some problem at the state level. Many states have not trained their field formation officers properly. These are states like Bihar, Jharkhand, Chhattisgarh, Madhya Pradesh (MP) and others. These states continue to have teething problems and glitches in refunding exporters”.

M S Mani, partner, Deloitte India, also said that “process-related impediments” continued to delay the refunds.

“While there has been some progress in sanctioning exporters’ refund claims, many process-related impediments continue to delay the refunds. Businesses would expect the timelines suggested at the time of introduction of GST to become a reality, now that we are a year ahead,” he said.

MONEY BACK

The government says the refund claims are Rs 14,000 crore while the FIEO claims it was close to Rs 20,000 crore
According to official data by the government, GST refund sanctioned to exporters till now was Rs 30,000 crore

Rs 20,000-crore – pending refunds, according to FIEO

Rs 7,000 crore – Refunds by CBIC

XaTTaX: Your automated Eway bill compliance is just a click away!

Source: DNA India

Commerce Ministry to resolve GST related issues of exporters in FTP

August 24, 2017 admin Comments 0 Comment

foreign trade policy (FTP)

The commerce ministry is reviewing the foreign trade policy (FTP) with a view to effectively address the concerns of exporters post-GST, a senior official said today.

Exporters have raised certain concerns after the implementation of the Goods and Services Tax (GST).

“We cannot let them suffer…We want to build in something in the FTP which addresses those issues of exporters,” the official added.

The Federation of Indian Export Organisations (FIEO) has stated that exporters are worried as they have to arrange funds for payment of GST which will be refunded to them upon exports.

First paying the duty and then seek refund would led to blockage of funds for over six months in many cases, thus affecting competitiveness of exports, the FIEO has said.

The official said that the ministry is looking at all these issues and that is why it is taking time to release the revised FTP.

“Lot of work is happening. We are looking at it (FTP) post GST. Post GST implementation, we are taking exporters’ inputs and trying to address that,” he official added.

Exporters have also raised concerns as implementation of the GST has limited the use of duty credit scrips by them as these can now be utilised only for payment of basic Customs duty and not IGST.

To deal with the issue of blockage of fund, the ministry has suggested to the GST Council that an e-wallet kind of mechanism could be evolved for virtual payment of GST so that the GST chain is not affected.

According to exporters, over Rs 1.85 lakh crore working capital of exporters may get stuck annually with the government under the GST. Blocking of this amount would push up the manufacturing cost of exporters as they have to borrow more from banks.

Use XaTTaX to file GSTR 3B Returns for free

Source: http://www.moneycontrol.com/news/business/economy/commerce-ministry-to-resolve-gst-related-issues-of-exporters-in-ftp-2368395.html

Export unease over GST

May 1, 2017 admin Comments 0 Comment

Exporters have expressed their concern over GST blocking their working capital as they would have to first pay the taxes and then claim refund.

“Exporters are not used to paying any taxes. The implementation of GST, which is good for trade and industry, would, however, block the working capital of exporters,” Ganesh Kumar Gupta, president of Fieo.

“If taxes are to be refunded, it would be better to continue with the existing system of exemption … locking of working capital is not a good move.”

“The basic issue is providing liquidity for the exporter or for the state. The exporters have to borrow at a market rate of 14 per cent, whereas states can borrow at 6 per cent,” Gupta said.

According to estimates, working capital of Rs 1.85 lakh crore working capital will get stuck annually with the government under goods and services tax (GST). This would push up the manufacturing cost of the exporters as they have to borrow more from banks.

Early refund

“GST clearly provides that taxes must be paid and that refund will be provided. So since the regime is so structured, the department of revenue has committed that 90 per cent of the refund will be made within seven days. Delays beyond that would invite interest payment,” commerce minister Nirmala Sitharaman has said.

She said exporters would be paid interest if the refund got delayed beyond two weeks. However, the interest rate has not been specified. For the remaining 10 per cent, the minister said it would be subject to whatever verification the revenue department is required to do.

Gupta said: “Fieo has taken up this issue with the working group set up by the government on GST.”

Rules for SEZ

Gupta said there was no clarity on whether I-GST (integrated GST) was to be payable in special economic zones.

“If I-GST is not payable in the tax-free zones, then the SEZ Act needs to be amended. Since SEZs are custom-bound areas there is a case for providing exemption from I-GST. This would provide an advantage to these zones and boost exports.”

In the current regime, SEZ developers and units import their requirements without any duty or tax. In addition, all the supplies from the domestic suppliers to SEZ developers are exempt from any tax or duty as they are considered exports.

Officials, however, said in the GST regime, SEZs will be technically considered within the domestic border of the country and render them equivalent to other domestic firms and are likely to attract the different tax components of the GST – CGST, SGST or I-GST. So, they would have to claim refunds of any unutilised input tax credits in GST.

Strong rupee

Expressing concern over the appreciation of the rupee against the dollar, Gupta said certain incentives in the form of interest subvention being offered to manufacturers may be extended to merchants and other exporters.

He said the Merchandise Exports from India Scheme (MEIS) across sectors can somewhat offset losses on account of the rupee appreciation. Gupta said he would be meeting the commerce minister and finance minister to discuss this issue.