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Posted at: Apr 24, 2019, 8:20 AM; last updated: Apr 24, 2019, 8:20 AM (IST)

GST authorities fail to adhere to timelines

Region’s exporters continue to suffer delay in refunds

What the GST Act says…

  • 90% provisional refund to be granted to exporters within seven days from the date of acknowledgement
  • Thereafter, upon detailed scrutiny, the refund order to be issued within 60 days from the date of acknowledgement
  • In case on non-refund within 60 days of receipt of application, an interest at the rate of 6% shall be given to the taxpayer
GST authorities fail to adhere to timelines
Illustration: Sandeep Joshi

Vijay C Roy

Tribune News Service

Chandigarh, April 23

A Patiala-based textile exporter has been awaiting State Goods & Services Tax (SGST) refund for the past three months. The delay in refund has cascading effect on the working capital of the manufacturer and also on outbound shipments.

In another case, a Chandigarh-based exporter has not been granted refund to date on an application submitted in February. Most of the refunds, especially in case of exporters, have been delayed beyond the time stipulated under the GST Act.

The delay in refunds has not only impacted these two exporters but there are many others in Chandigarh and Punjab who are facing delays in refunds, despite the Centre’s and state’s repeated assurance of speedy refunds.

As per law, in case of exporters, 90% provisional refund must be granted to the exporter within seven days from the date of acknowledgement. Thereafter, upon detailed scrutiny, the refund order shall be issued within 60 days from the date of acknowledgement. Further, Section 56 of the Act prescribes that where the tax is not refunded within 60 days of the receipt of application, an interest at the rate of 6% shall be given to the taxpayer.

“The tax department is taking more than the stipulated time and also not granting additional interest to the taxpayer for the delay in the refunds. This is leading to blockage of huge working capital for the parties entitled to refund,” said Keshav Garg, a Chandigarh-based tax consultant.  

“Our application was submitted in January 2019 to the state authorities whereas to date no payment has been received. The refund is of around Rs 40 lakh,” said another exporter who wished not to be quoted. Sources further said in yet another case, in case of CGST department and in case of inverted duty structure, the refund is pending in respect of application submitted on February 6.

“Not only the refund is getting delayed, but to make things worse, even there is no question of payment of interest by the department for the delay caused at their end,” said another exporter.

“For Punjab-based exporters, the refund is pending with the department for the past 3-4 months and the department is least bothered about the plight of the industry. The tax officials are unnecessarily creating hurdles in releasing the refunds,” said Badish Jindal, president, Federation of Punjab Small Industries Association.

According to industry insiders, proper instructions need to be issued to the departments concerned and harassment of taxpayers must be stopped immediately, as it is leading to working capital crunch and production losses.

In January this year, acting on the plea of Punjab exporters, Union Commerce Secretary Anup Wadhawan had assured that an online mechanism would be introduced which will ensure faster SGST refund on the lines of Integrated Goods & Services Tax (IGST).

GST refund process is online but claiming input tax credit (ITC) refund in case of SGST still requires manual intervention. Unpaid input tax credit constitutes the majority of refunds under the GST. Making ITC refund online would not only ensure that export refunds are seamless but it would also make the entire process transparent and accountable. 


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