Refunds issue under GST for SMEs is worrisome, says a Parliamentary panel

"The Parliamentary Standing Committee on Commerce notes that the problem of delayed refund is across the industry irrespective of their size and contour. It is not only the MSME but even the large corporate houses  that have been impacted.....the impact is more damaging for small enterprises. The Committee finds this very worrisome," said the panel headed by Akali Dal MP Naresh Gujral.

"The Committee is of the opinion that a simplified system for filing of refunds needs to be devised which in in line with the policy of ease of doing business," said the report tabled in the ongoing winter session of Parliament.

The panel also said that department should take all measures to educate and assist exporters, especially micro and small exporters, in order to enable them to handle technical glitches and several other issues that are coming in the way of exporters while filing refunds. 

The committee comprising among others Kapil Sibal, Abhishek Manu Singhvi, Kamal Nath (all Congress), Roopa Ganguly, Bijoya Chakravarty (both BJP) and Abhishek Banerjee (Trinamool) said that "it fails to understand" that if the facility for filing GSTR-1 for August 2017 would be ready by December 2017, then how come refund claims of Integrated GST paid for exports made in August, September and October 2017 are "being sanctioned seamlessly" wherever returns have been accurately filed.

It also said that the claim that the government has taken various measures to alleviate the difficulty and is fully committed to provide "speedy disbursal of refunds due to exporters calls for more concerted action on the ground".

The committee also said that the problems faced by exporters to claim refunds through the GSTR-1E or Form 6A should be addressed by the government at the earliest.

The panel also took exceptions that "refunds are being disallowed on slightest pretext" and observed that the committee members found that the "difficulty of handling the system from compliance perspective has been an issue for exporters and businesses at large".

Among other things, the panel said the Rule 96(2) of Central GST Rules may be amended suitably so that the Integrated GST claim can be processed on the basis of report summary as it was being done in case of drawback disbursal.