Bizmen suffer due to delay in GST refunds

The industry in the city is perturbed over inordinate delay and withholding of GST refunds by the state government. Many industrialists, whose refunds are held back by the department, reasons best known to officials, feel that the move was “unlawful”, due to which the industry was not able to use their funds.

Talking to The Tribune, Badish Jindal, president, FOPSIA, and World MSME Forum, said industry’s GST refunds were pending with the department for the past five-six months.

“The major reason for the pendency could be the increase in bogus billing in which the GST is claimed fraudulently by many, following which the department has started the verification process minutely. But in the exercise, the GST refunds of genuine industrialists are also being delayed and withheld and their huge capital gets stuck,” he said.

The industrialists rued that the GST refunds in question arise from inverted duty structures, where the input tax rate exceeds the output tax rate — a scenario explicitly accounted for under Section 54(3) of the CGST Act, 2017. These refunds are not a concession but a legally enforceable right of taxpayers who had already discharged their liabilities in excess. By withholding the refunds, the state government was violating statutory obligations under GST laws and “the ease of doing business” slogan was lost, maintained the industrialists.

President of the Association of Trade and Industrial undertaking (ATIU) Pankaj Sharma said the “harassment” by GST officials had increased a lot after the election process and it could be due to the mounting pressure for achieving their targets.

“We do understand that bogus billing is a blot on the industry through which wrong claimants get GST refunds but in the entire process, many genuine taxpayers were also suffering as their refunds were not being released by the department. Instead of visiting the premises on a daily basis, department officials should ask industrialists to visit their local office with desired documents, in case they need to get clarifications on any matter,” he said.

At the same time, there are industrialists who feel that the state’s inability to meet its statutory obligations exposes a bankrupt treasury, hollowed out by populist freebies and unsustainable expenditures.

The GST Department officials are conducting regular surveys to crack the whip against tax-evaders. The surveys, followed by notices served in many cases, are being conducted in factories, restaurants, hotels etc. At the same time, the delay in genuine cases has shattered investors’ confidence, compelling businesses to explore relocation, the industrialists said.

Meanwhile, despite repeated attempts, the Deputy Excise & Taxation Commissioner (DETC) could not be contacted for comments.