GST Refund Claims: Finance Ministry Says Pendency Is Low And That Figures Doing The Rounds In Media Are Wrong

The Union Finance Ministry has clarified that the pending Goods and Services Tax (GST) refunds on account of exports amounted to only Rs 2,077 crore till date.
In a statement on Friday (12 October), the Ministry said, “It has been noticed that unverified reports of pending GST refunds on account of exports are published in the print media by trade bodies. These figures being put out in the public domain are exaggerated and thus inaccurate. It is a fact that a large number of exporters have been granted refunds so far, while a few claims are still pending owing to deficiencies found in the claims.”

A few months back, Federation of Indian Export Organisations (FIEO) claimed Rs 20,000 crore was pending with the government on account of GST refund and claimed that it was creating a “liquidity crisis” for exporters. FIEO on Sunday pointed out that the delay in refund was mainly impacting small exporters who provide jobs in labour-intensive sectors. More recently, FIEO said that refunds of about Rs 7,000 crore were pending on account of Integrated GST (IGST) and about Rs 15,000 crore Input Tax Credit (ITC) as of 30 September. “This is impacting small exporters,” said Ganesh Kumar Gupta, president of FIEO.

A member of Apparel Exporters and Manufacturers Association had recently claimed that delays in refund on account of IGST and ITC were mainly impacting small exporters due to their inability to follow up and deal with refund authorities. Rubbishing reports of pending GST refunds, the Finance Ministry clarified that about 92.68 per cent (Rs 38,824 crore) of the total IGST refund claims (Rs 41,889 crore) transmitted to customs from Goods and Services Tax Network (GSTN) as on date had already been disposed of.

The remaining claims amounting to Rs 3,065 crore were held up on account of various deficiencies which have been communicated to exporters for remedial action. In the case of RFD-01A (ITC Refund) claims with the Centre and the states, the pendency as on date was only Rs 2,077 crore. Out of the refund claims of Rs 39,372 crore received, provisional/final orders have been issued in case of refunds amounting to Rs 32,345 crore.

“In claims amounting to Rs 4,951 crore, deficiency memos have been issued. Thus, actual pendency is far less than is being put out for the knowledge of the public. The overall disposal of GST refunds is Rs 71,169 crore till date. Refund claims without any deficiency are being cleared expeditiously,” the Finance Ministry stated.

The Ministry added that efforts were being made continuously to clear all the dues on account of pending refund claims. “Cooperation of the exporter community is solicited to ensure that they exercise due diligence while filing GSTR 1 and GSTR 3B returns as well as shipping bills,” it said.

The ministry further said that extensive outreach programmes have been conducted along with the issuance of guidance circulars, advisories and advertisements. Also, an alternative procedure involving manual interface has been provided, where the errors could not be corrected online.

“The efforts are beginning to show positive results. The exporting community is assured that all their eligible refund claims will be sanctioned without any delay. Further, the export bodies are also requested to put out only verified figures in their press communication as unsubstantiated reports cause needless alarm amongst the exporters,” the statement added.