Taking action on adverse feedback

Topics CBIC | GST

Last week, the Central Board of Indirect Taxes and Customs (CBIC) issued two circulars, to help exporters get their goods and services tax (GST) refunds on account of zero-rated export. The minister for commerce and industry announced a huge subsidy for sugar export. Also, allowed single-brand retailers to factor in export while calculating the percentage of local sourcing.

More announcements to help exporters are expected when the finance minister unveils her next two instalments of measures to revive the economy and when the commerce ministry announces the next Foreign Trade Policy.

About 10 earlier, the finance minister had announced that all GST refund due to micro, small, and medium enterprises (MSMEs) would be settled within 30 days. And, in future, all GST refunds to MSMEs were to be granted within 60 days. The major complaints on such refunds relate to those on account of export.

In May last year, the CBIC  had issued instructions  to sort out cases in respect of shipping bills filed till end-March 2018, where the records could not be transmitted from the GST Network, the system’s information technology backbone, to the Customs systems (due to payments mismatch in GSTR-1 and GSTR-3B returns). That interim solution has now been extended to shipping bills filed till end-March 2019.

The CBIC had similarly issued various instructions in February, March and October last year, giving an alternative mechanism with an officer interface, to resolve invoice mismatch for shipping bills filed till mid-November 2018. That facility has now been extended to such bills filed till end-July 2019. 

Field formations have also been advised to conduct outreach programmes, to make all stakeholders aware about the correct procedure for claiming IGST refund. 

The Board has also clarified various issues in grant of GST refunds to specialised agencies like the United Nations.

The government has issued a notification extending the due date for filing the annual returns (GSTR-9, 9A and 9C) to end-November. The extension, it says, is due to some technical problems faced by taxpayers. In fact, many of the latter are unable to reconcile the details furnished in monthly or quarterly returns with the annual financial statements and to get these certified by chartered accountants. In the initial years of GST, too many changes were being made and taxpayers proceeded in line with their understanding of the law. And, made many mistakes in the filling of details in the complicated returns. Now, they find it difficult to satisfy their auditors, get the certifications and file the annual returns.

The Union Cabinet has approved an export subsidy of Rs 6,268 crore to liquidate the surplus domestic stock of sugar and to help mills in clearing sugarcane payment arrears to farmers. A policy of subsidising export is always questionable because that amounts to our taxpayers subsidising foreign consumers. Anyway, the latest move might help alleviate the distress of cane growers in the short run.

The measures to encourage foreign direct investment in the retail trade, coal mining and contract manufacturing could help in the medium run. We have to wait and see the impact.

Overall, the government has sent a clear message that it is listening and is willing to take the necessary steps to revive the economy. This has somewhat helped reverse the market sentiment.

Email: tncrajagopalan@gmail.com


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