GST reforms: 38,700 exporters to get faster refunds, wider access to input tax credits

Almost 38,700 export taxpayers will become eligible to claim cash refunds on input taxes paid on services and plant and machinery, directly addressing the long-standing issue of working capital being locked up under the indirect tax framework.

The GST Council also changed the refund process, wherein 90% of the claim will be released automatically based on a risk check, while the remaining amount will be paid after the usual verification. Exporters stand to benefit from faster GST refunds, with the acknowledgement deadline reduced to 10 days from 15 days.

An exporter who claims a duty drawback is now equally entitled to a refund.

“The approach has been something which is really export in character, in its economic and financial way, the tax also should recognise that,” said revenue secretary Arvind Shrivastava.

Wider opportunities have opened for service exporters. The council has approved billing through a branch abroad, wherein an Indian firm serving a foreign client through its own overseas branch can now avail export benefits. Testing, repair, certification, processing carried out in India on goods belonging to a foreign client will count as exports even when the goods remain in India.