NEW DELHI: Small businesses, mainly exporters, are at loggerheads with Finance Ministry over the input tax credit refunds. While exporters claim the government has been withholding refunds for over five months, the tax department says it holds back refunds only of suspicious accounts.“Exporters’ claims of over five months are pending, which has completely wiped out their liquidity and kept them in doldrums with regard to finalising new contracts.
The problem of risky exporters has further compounded the liquidity issue as their GST and drawback claims have also been held up,” said Sharad Kumar Saraf, president, Federation of Indian Export Organisations.
Citing a small fraction of fraudulent cases, the tax department is hurting the whole industry, he said.
“Unfortunately, the e-wallet scheme, which was recommended by the GST Council in October 6, 2017, and was first expected to be put into operation by April 2018 and later deferred to October 2018, has not yet been rolled out,” Saraf added.
On the other hand, tax officials say they aren’t withholding any legitimate payments. “In the last 2-3 weeks of crackdown, we found that some of the ‘star’ export houses had fraudulently claimed IGST refunds. In many instances, addresses did not match,” a senior tax official said, adding that nine star exporters were not traceable at their addresses.
Saraf clarified that exporters have import-export codes based on PAN and bank accounts. They have also obtained GST registration through KYC cross-verification of email and mobile numbers, he said.