Govt tells taxmen to expedite refunds; GST law provides for tax neutralization for exports. Officials told not to withhold refunds for want of export proceed proof.
In a major relief for the export sector, the customs authority has directed tax officials not to insist on proof of realisation of exports proceeds for processing of input tax refunds. Delay in issuance of refunds has been a sore point for exporters since the switchover to goods and services tax (GST) regime in July 2017.
The new directive from the Central Board of Indirect Taxes and Customs (CBIC) follows assurance from finance minister Nirmala Sitharaman to the industry on easing of compliances. The circular makes it clear that tax authorities will not insist on proof of realisation of export proceeds for processing of refund claims related to export of goods as it has not been envisaged in the law.
CBIC emphasised that exports have been zero rated under the Integrated Goods and Services Act. Hence, as long as goods have actually been exported, even after a period of three months, tax officials should not insist on payment of integrated tax first and claiming refund at a subsequent date. There have been reports that exporters were being asked to pay integrated tax in cases where the goods were exported more than three months after the date of the issue of the invoice for export.
