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The issue of GST refunds has been a sensitive one for quite some time, especially for exporters. At many points, concerns were raised about GST refunds getting delayed, leading to blockage of working capital for numerous businesses across the country. In this blog and the next, we will discuss some recent updates with regards to the GST refund – both for exporters as well as UINs.

GST Refund Updates for Exporters

In order to assure the community of businesses, especially exporters, CBIC released a notification in November 2018, providing detailed statistics with regards to the sanction and release in GST refunds. As per official records, the disposal rate is actually improving month on month, contrary to apprehensions of delay.

Overall GST Refund Status

As on 31st October 2018, GST refunds of INR 82,775 crore have been disposed by the Centre and State authorities, out of the total GST refund claims of INR 88,175 crore received so far. This means that as on 31st October 2018, the disposal rate has been a phenomenal 93.8%. The pending GST refund claims amounting to INR 5,400 crore are being speedily processed as you read this, which is bound to provide relief to all eligible exporters.

GST Refund Status – IGST Claims

In case of IGST refunds, about 93.27% i.e. INR 42,935 crore of the total IGST refund claims i.e. INR 46,032 crore, has been transmitted to Customs from GSTN as on 31st October 2018. The remaining IGST refund claims amounting to INR 3,096 crores are held up on account of various deficiencies, which have been communicated to exporters for immediate action.

GST Refund Status – ITC Claims

In case of RFD-01A i.e. ITC refund claims, the scenario, as on 31st October 2018 is as follows:

  • Total GST refund claims = INR 42,145 crores
  • Total GST refund issued via provisional / final orders = INR 34,601 crores
  • Total GST refund pending = INR 7,544 crores
    • Pending with Centre = INR 159 crores
    • Pending with States = INR 2,146 crores
    • Pending because of deficiency issues = INR 5,239 crores

In all cases of deficiency, memos have been issued by the respective GST authorities.

In conclusion, efforts are being made by the government to continuously clear all the pending GST refund claims, wherever the required information is provided and found to be eligible. With the exporter community responding to the deficiency memos and to the errors communicated by the Centre and States, as well as the Customs Authorities, the situation is bound to improve further. Most importantly, exporters will need to apply the due diligence while filing GSTR 1 and GSTR 3B returns as well as while passing shipping bills – which should make the GST refunds process faster.

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Pramit Pratim Ghosh

Author: Pramit Pratim Ghosh

Pramit, who has been with Tally since May 2012, is an integral part of the digital content team. As a member of Tally’s GST centre of excellence, he has written blogs on GST law, impact and opinions - for customer, tax practitioner and student audiences, as well as on generic themes such as - automation, accounting, inventory, business efficiency - for business owners.