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The troubles under the Goods and Services Tax have been reduced to a great extent by the combined efforts of the people and government. But the problems occur much frequently in the new taxation regime. At the beginning of the GST roll-out, the entire taxation process caused discomfort to the taxpayers. Following the continuous maintenance of the regime, the people started complying with the regime in large numbers. Then again the problem of the delayed refunds arose that made the whole progress in the regime look lethargic.

You would be amazed to know that the refund amount of around INR 10,000 crores stands still as the exporters wait for the credit. This has made the small exporters suffer the most. With refunds stuck with the government in such large amount, the exporters are struggling for the working capital. However, the problems are at both, the government and taxpayer’s level. On one hand, you are not accountable if the government took too long to roll-out easier return process. And on the other, the careless return filing practice of the taxpayers made the system stagnant.

What factors are affecting the refunding process?

As the total refund amount is INR 14,000 crores and INR 10,000 crores is still not passed further to the taxpayers, various reasons are accountable for this setback. Let’s take a look at the most major ones:

1. Late return filing: It’s no unexplained fact that the GST tax rules made everyone’s taxation hectic. To put it another way, the people of the nation weren’t ready for such abrupt implementation of a completely new taxation regime. But when the government started fixing GST, it required the people to walk hand-in-hand. In the return, the taxpayers became neglectful. Even a single mistake in the returns form can make the entire process stop. The deployment wouldn’t have slowed down if a streamlined approach of filing returns would have been followed. Such wrong and late return filing attempt created a whole chunk that became a hurdle in the way of timely refund credit.

2. Unavailability of the refund module: The refund module (RFD-01) stands equally accountable for the non-clearance of the exporter’s refunds. This module is not available on the common GST portal. Due to such lack of features in the portal, the taxpayers are not able to put forward the request claiming returns. The refund module is the only way through which you can claim the refunds. Besides the refund module, the refund would only be credited to your account once the GST portal automatically resolves it. Again, this process takes forever to complete due to the errors in the returns and late filing. The government is still looking for a way to overcome this repercussion.

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The helping hand of GST software

Always backing the GST regime with amenities, the technology has been a great aid to reduce the time consumed in complying with it. And right now the main problem is of time. The delay can be effectively reduced to none but first, the government has to formulate a full proof strategy. On that note, what would you rather prefer? A hectic return filing process on the GST portal or an automatic method that files return within seconds? Of course the second option, as it is smart to save your time and money at the same time. Similarly, the people would not only show their trust in the application integrated but the refund will also be passed to the taxpayers on time.

Although the government has already planned to integrate the regime with an EDI system. The EDI stands for electronic data interchange. Under this process, an assigned official could cross-check the invoices uploaded by the taxpayer anytime. And if he finds the information correct, then he could further initiate the process of refund transfer to the taxpayer. With GST software, this process will become smoother than expected. FYI, EDI is yet to be implemented but has already been tested at some places and found effective. Hence, the government could announce its roll-out anytime soon.

Above all

As the government has been solving all the compliance related problems, the solution for the refunds matter will arrive soon. The matter of the utmost concern is that not only the refunds of those who paid tax but also who haven’t paid is stuck with the government. As per the GST Tax rules, the exporters can claim the tax paid on inputs regardless of their tax payment status. The total amount that still needs to be released by the government sums up to around INR 20,000 crore. As of now, the government is only left with the option of first releasing the exporter’s refunds so that the smooth flow of a business could be sustained.

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