NEW DELHI: Exporters have informed the Finance Ministry that goods and services tax refunds are getting delayed due to airline and shipping companies not submitting proof of export to customs and mismatches of invoice numbers in shipping bills and GST return forms.
India's exports dipped for the first time in 15 months in October, falling 1.1% to $23.1billion and are expected to fall further in November as exporters turn away clients and new orders while they get to grips with the new tax regime, which was rolled out on July 1. Last month's trade deficit widened the most in three years to $14 billion.
The Federation of Indian Export Organisations (FIEO) also said that despite the Customs Department allowing manual filing of input tax credit refund claims more than 10 days ago, the required application form (RFD-01A) is not available on the GST portal.
"Only a fraction of the IGST (integrated GST) claims of July has been paid. The process has not even started for input tax credit," FIEO Director General Ajay Sahai said.
Industry estimates that 85% of refunds are on account of input tax credit and 15% from IGST. The delayed refunds are pegged at as much as Rs 50,000 crore.
Exporters also said there are no clear instructions on whether to mention the GST invoice number in the shipping bill as opposed to the commercial invoice number as has been done traditionally. They also complain about being "absolutely in dark" about the status of their pending claims and want to be able to view the status of such payments.
Most of India's traditional exports like textiles, leather and gems and jewellery fell in October even as global demand is stable. The Country lost market share to Sri Lanka, Vietnam and Bangladesh in textiles and to China in footwear, according to Sahai.
"Exporters have informed that jurisdictional authorities are unaware of the procedure for refund. The details of documents required for refund are also not prescribed," said the FIEO letter. Exporters have also expressed their reservation against a manual system that adds to transaction time and costs.