It is welcome news that the Goods and
Services Tax (GST) Council — the all-powerful federal indirect tax body — at
its meeting on September 20 is expected to approve the procedure to permit a
single authority for sanctioning and processing GST refunds for exporters in a
quick and an efficient manner.
authority mechanism eliminating complications faced by the taxpayers
It is worth noting that as per the
proposed single authority mechanism, once a refund claim is filed, whether
Centre or State, the Tax Officer will check, review and sanction full tax
refund (both Central GST and State GST portion), thus eliminating complications
faced by the taxpayers.
The move a much-needed boost to the
stressed exports sector
The move may give a much-needed boost to
the stressed exports sector, which contracted 0.37 per cent to USD 107.41
billion in April-July 2019-20 as the sector is facing challenges because of
sluggish global demand and liquidity crunch.
GST Council, headed by Union Finance Minister Nirmala Sitharaman and comprising
representatives of all States, is slated to meet in Goa and discuss the
At present, the system entails a twin
refund sanctioning authority, central and state tax officers. This could well
change when the proposed new mechanism involving a single authority comes in
place. Currently, if a taxpayer files for a refund with a Central Tax Officer,
then he would clear 50 per cent of the claims, while the remaining is approved
by the State Tax Officers after further scrutiny.
mechanism of two authorities too much inconvenience for the taxpayers
Many industry watchers say the current
mechanism of two authorities settling the same refund claims makes the process
complex and cause too much inconvenience for the taxpayers.
authority would reduce litigation
Mr. Bipin Sapra,
Partner, EY, said, “A
single authority for clearing the refunds would ease the burden of exporters to
a large extent … It would also streamline and reduce litigation and bring more
uniformity in the position taken.”