New Delhi, Sep 22

With exporters complaining of their working capital being blocked under the GST regime, the Finance Ministry on Friday said that it was considering ways, including manual clearance, to speed up refunds.

The exporters' refunds have been pending as they can be processed only after November 10, the deadline to file GSTR 3, which is a combination of sales and purchases.

"Lot of people are speculating that the refund for inputs in case of exports under Goods and Services Tax (GST) will be available only when regular form GSTR 3 is filed for every month. This is not the case.

"We are trying to find a way of giving refund by linking form GSTR 1 with form GSTR 3B and therefore, for the month of July, where form GSTR 1 is already filed, the authorities would be in a position to process the refund applications," the Finance Ministry said in a statement.

The ministry advised the exporters, who have not yet filed form GSTR 1 for July to file it immediately and not to wait till the deadline (October 10).

"GST Network (GSTN) application for refund is also getting ready. But, in the meantime, we are also finding other ways of giving refund, if necessary through a manual procedure," it said.

The government clarification came amidst reports of apprehensions about the blockage of working capital for exporters post-GST.

The Committee on Export set up by the GST Council has discussed various methods of resolving the issue of blockage of funds for the exporters, it said.

"The Committee interacted with the exporters of eight sectors who made detailed presentations on the problems being faced by them. It is working on issues of exports sector and would present the solution to their problems before the GST Council as soon as possible," the statement said.

In the meantime, the authorities of state governments as well as the central government have been requested to clear the pending refund claims of central excise and value-added tax (VAT) for the pre-GST period, so that the exporters will get immediate relief, the ministry stated.

Moreover, it said that in respect of 66 per cent value of exports, exporters have preferred the duty drawback scheme instead of taking actual refund of input taxes in the pre-GST regime.

Duty drawback scheme was actually extended in the post-GST regime for a period of three months, up to September 30, subject to the exporter not taking input tax credit under GST.

"This means that as of now, for 66 per cent of the value of exports, there is no blockage of funds," it said.

The Duty Drawback Scheme seeks to give rebate on the tax chargeable on imported goods or input services used in the manufacture of export goods.

The government said that the problem of blockage of working capital is not as grievous as it is made out to be as the remaining 33 per cent of exporters always used to prefer a normal refund route for taxes paid on inputs for central excise separately and for VAT separately and that was made available to them only after the actual exports took place.

"For such class of exporters, earlier also there was a normal blockage of funds for a period of five-six months at least except for those using facility of advance authorisation," it said.

 

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