GST Update -A Sign of Relief for Exporters as Centre to pay ITC Refund for State GST

GST Update -A Sign of Relief for Exporters as Centre to pay ITC Refund for State GST

As per the Union Budget 2019-20 the center will now pay the input tax credit (ITC) refunds of state taxes, thereby reducing transaction time and costs, and manual interface in claim processing by inserting a new sub rule 8A under section 54 of the CGST Act.

There was a huge demand from the industry that the refund sanctioning procedure takes a lot of time and involves a lot of cost of the exporters.

At present, if a taxpayer having jurisdiction with Central GST department then he will file refund claims with the central tax officer. The refund will be decided by the authority only but the amount of CGST and IGST will remitted by accounts department of CGST and amount pertaining to SGST refund will be reimbursed by SGST department. For this purpose, copy of refund sanctioned order will go to accounts department of CGST department and one copy to the officers of SGST department. The SGST department will forward this order to treasury who in turn will pass the amount by RTGS in account of taxpayer. This whole process consumes much time and taxpayers receives the amount after 15-20 days from the sanction order.The same process in reverse direction will be repeated if the taxpayer is registered with SGST department.

Hence, we have represented the matter before various authorities that the refund should be sanctioned and remitted by same authority. Thereafter, the central and state department should settle their claims by adjustment entries. The poor taxpayer should not repent for the same. We are pleased the genuine demand of taxpayers has been listened and refund will be sanctioned as well as remitted by single authority.

This will give a high sign of relief to the exporters and will ease the problems faced by them under the refund mechanism. We welcome this move of the Government. But it should be made functional at the earliest by amending the GST portal.

This is solely for the educational purpose.

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GST Update -A Sign of Relief for Exporters as Centre to pay ITC Refund for State GST

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