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Big Relief For Exporters: Quicker Input Tax Refunds Soon

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In a bid to woo the exporters, the central government has eased out the input tax refunds processes. The customs authority has directed the tax officials to not ask for proof of realisation of exports for processing the tax refunds.

Exporters for long have been demanding easy process for input tax refunds as the move to GST regime had compounded the delay even more. Earlier, finance minister Nirmala Sitharaman had assured the industry on easing the norms. The directive of the Central Board of Indirect Taxes and Customs (CBIC) is being seen as an implementation of the assurance by the finance minister.

The circular has been issued with an order that the 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 laid out that exports have been zero rated under the Integrated Goods and Services Act. Therefore, 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 a refund at a later date.

The issue was raised by the exporters that 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.

Economic Times quoted Harpreet Singh, Partner at KPMG, “The circular has provided some key relaxations. Tax authorities will no longer insist on proof of realisation of proceeds, or on payment of tax before refunds are initiated when the export is delayed.”

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