~100 crof GST refunds stuck, say tea exporters from South India
At least~100 crore worth of goods and services tax(GST) refund of tea exporters from South India are stuck, impacting working capital and outbound shipment, say industry representatives.
Dipak Shah, chairman, South India Tea Exporters Association, says the government is continuously extending the date for filing of returns and, as such, no merchant exporter is able to get refund of the taxes paid. “This is a failure of the total system,” he alleged, adding that though the Centre had issued a notification to give relief for exporters, the refund option is still not available on the GST Network, the system's information technology backbone. He estimates ~100 crore of tax refund dues.
A tea exporter says he and others are now looking to meet their working capital requirement from private financing, as they've exhausted the bank limits. "This happens at an interest burden which is sometimes 24-30 per cent, against the usual seven-eight per cent given by banks. This is purely to honour export commitments," he said.
As a result, there is hesitation on concluding future export contracts. Which, in turn, could mean lower demand and a drop in prices.