As about 70 per cent of goods and services tax (GST) refunds stuck due to flawed information, the central board of excise and customs (CBEC) has asked exporters to amend the details in the final returns of subsequent month to enable the department to process the refund claims by March.
CBEC has sanctioned Rs 4,000 crore worth refunds to exporters in 4 months since October. Still about Rs 10,000 crore worth of claims are stuck due to discrepancies in the information furnished by exporters to GST Network (GSTN) in filing GSTR 1 or Table 6A or GSTR 3B and shipping bill filed with the customs department.
“The analysis of data indicates that only about 32 per cent records of GSTR 1/Table 6A have been transmitted from GSTN to the customs department. In other words, a majority (about 70 per cent) of refund claims are held up either due to insufficient information or lack of due diligence on the part of exporter while filing GST returns,” CBEC said in a communication to principal commissioners.
The analysis of claims data after October 2017 indicate that while the quantum of error is decreasing, a large number of exporters are still filing incomplete GSTR 1 or Table 6A, where shipping bill number or date or port code are missing.
GSTR 1 is a monthly return of outward supplies. GSTR-3B is a monthly return to be filed by regular dealers for July 2017 to March 2018. Table-6A is basically a facilitator and a mechanism to expedite the refunds for the exporters who missed out filing GSTR 1, according to GST filing provisions.
“These records are not processed/forwarded to the customs department by GSTN. E-mails have been sent to exporters asking them to correct their records through amendment process of GSTR 1 ie through Table 9 of GSTR 1 of the following month,” CBEC said.
CBEC had in October 2017 started refunds for exporters of goods who have paid Integrated GST (IGST) and have claimed refund based on shipping bill by filling up Table 6A. While for those businesses making zero-rated supplies or those want to claim input credit have to fill Form RFD-01A.
Analysis of GSTN data shows that in a large number of cases, the refund claimed by an exporter is higher than GST paid by him and consequently, the information filed by exporters is not forwarded to the customs department by GSTN.
In these cases also, e-mails have been sent to exporters asking them to correct their records through amendment process of GSTR 1 ie through Table 9 of GSTR 1 of the following month,” CBEC said. The apex indirect tax authority also said where exporters have already filed information through Table 9 of GSTR 1; the said information is being validated by GSTN. “The validated information is expected to be forwarded by GSTN to customs by mid-March 2018 for further processing,” it said.
AMRG & Associates Partner Rajat Mohan said the issue could be resolved if GST compliance structure is simplified and government programmes are designed to achieve a robust digital literacy in the long run.
“IGST refund to exporters are issued in a fully automatised environment, and even a smallest mismatch in invoice number results in non-issuance of refunds. Now, the government has planned to provide an alternative mechanism whereby exporters can get such errors rectified with the help of a manned interface placed at the customs department. This could address the worries of the exporters if this manned intervention is operated timely,” Mohan said.
CBEC listed out the major errors that are committed by the exporters in claiming refunds. These are mismatch of invoice number, taxable value and IGST paid in the shipping bill vis-à-vis the same details mentioned in GSTR 1/Table 6A, incorrect shipping bill numbers in GSTR 1, GSTIN declared in the shipping bill does not match with GSTIN used to file the corresponding GST returns.
Besides, there are instances of non-filing or incorrect filing of electronic export general manifest. “Information is being made available to exporters on a real-time basis with regard to the errors status on ICEGATE website for registered users. Details of refund sanctioned is being sent through SMS on registered mobile phones,” CBEC noted.