Tax Reforms

Centre to launch tax refund drive in bid to help exporters


Mains Paper 2: Governance | Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential

From UPSC perspective, the following things are important:

Prelims level: CBIC

Mains level: Aim of the tax drive

A tax refund drive by the CBIC

  1. Central Board of Indirect Taxes and Customs (CBIC) has launched a tax refund drive in the first fortnight of June
  2. And issued instructions to swiftly settle refund claims of exporters that are held up because of mismatches in the returns filed by them

Aim of the drive

  1. The move is meant to streamline the new indirect tax regime and improve the cash flow of exporters who have been complaining that refund delays make them less competitive
  2. CBIC has been trying to reduce refund delays but mismatches in the returns filed by exporters are a key hurdle
  3. The changes in refund processing procedure and the refund drive from 31 May to 14 June are expected to address this

The drive will specifically help exporters

  1. The move will especially help exporters who were not getting refunds because of mismatches in goods and service tax (GST) returns
  2. It noted that exporters have inadvertently erred in declaring the integrated GST (IGST) paid on exports as IGST paid on interstate domestic supplies while filing their summary tax returns
  3. Some exporters also short paid taxes against the liability declared in their sales returns
  4. As a result of these mismatches, refunds could not be processed
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