GST Refunds: Already Late, E-Wallet to Miss October Deadline
The roll-out of an e-wallet mechanism for exporters under the goods and services tax (GST) regime may be delayed again beyond the proposed date of October 1, as the required systems are not yet in place, according to trade and official sources.
The e-wallet mechanism was initially planned to be introduced from April 1, which was then delayed to October 1. Any delay in its roll-out, without speedy refunds, could hurt exporters as the country looks to scale up outbound shipments to $350 billion in the current fiscal, up 16% from a year before. In 2017–18, merchandise exports had grown 10%.
The GST Council has said that more time was needed to address many legal, administrative and technical issues, the report suggests. The e-wallet mechanism was expected to be launched on April 1. However, it had been delayed to October 1.
As per the proposed e-wallet mechanism, a notional credit would be transferred to exporters’ accounts based on their past record and the credit can then be utilised to pay taxes on inputs. Once the e-wallet is in place, exporters do not have to pay taxes first and then seek refunds. It will typically act as a virtual payment system whereby the exporters will pay only notional duty and get notional refunds later.
While extending the April deadline for e-wallet, the GST Council had conceded that “more was needed to be done to address a large number of identified technical, legal and administrative issues”.
The Central Board of Indirect Taxes and Customs (CBIC) had organised ‘refund fortnights’ to speed up the process further. At the end of July, when the last ‘refund fortnight’ was held, the total GST refund collected by the Centre and states was Rs 54,378 crore.
According to the report, exporter awareness campaigns were organised by the CBIC during the refund fortnights along with steps like special refund cells at CBIC offices and GST Refund Help Desks at 11 locations.
Exporters have said that while refunds under the integrated GST regime are being processed fast, getting refunds against input tax credits is still a time-consuming process.
