By Anuradha Shukla
Copyright indiatimes
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The decision to allow 90% upfront refund for exporters under the goods and services tax (GST) framework may take time to be operationalised as the proposed revamp of the refund mechanism would require a change in the law.The Centre is now mulling an ordinance to fast track the process and has asked the law committee under the GST Council to examine it, people familiar with the development said.The GST Council had earlier this month announced upfront release of 90% refunds for exporters on the provisional basis when it revealed tax reforms with a two-slab structure. The current law – specifically Section 54 of the Central GST Act, which deals with the refunds – does not have a provision that allows for risk-based provisional refunds. This becomes more complex in the case of industries with inverted duty structure. This section will need to be amended to facilitate refunds, people cited above said.Live Events”There is an issue… The law committee is working on it,” an official said.The law committee is already working on the definition of “risky taxpayers.”The upfront release of 90% refunds for exporters was one of the GST structural changes aimed at bringing relief to small businesses in general and exporters in particular.By front-loading refunds, the government seeks to ease the financial burden on exporters and enhance the overall trade environment amid the 50% imposed tariff by the US.Once implemented, this will bring immediate relief to sectors such as textiles, chemicals, fertilisers and pharmaceuticals sectors and will unlock their working capital.Blocked refund claims are a persistent complaint among domestic businesses operating under the inverted duty regime in sectors such as pharmaceuticals, fertilisers, and textiles, where inputs attract higher taxes than finished products.Add as a Reliable and Trusted News Source Add Now!
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