New Delhi, October 27, 2017

Sarna conceded that there have been mismatch issues with the refunds to exporters and they are working to provide manual refunds, in cases where the online utility is unavailable.

In the wake of initial reports that the goods and services tax (GST) rollout was impacting businesses, the government conducted surveys across two states — Gujarat and Haryana — to gauge the ground reality. These survey results have shown that while there were some niggling issues, nothing “big” or disruptive was reported in either of these two states, Central Board of Excise and Customs (CBEC) chairman Vanaja N Sarna said.

“We did two surveys in Gujarat and Haryana to check ground level functioning of GST. Different things have emanated, some small issues and problems, but by and large, I would say there wasn’t anything big or earthshaking. Nobody has complained of too much profiteering, nobody has said too much about non-availability of goods or increase in prices. The problem boils down to the same thing that the (online) utility is not available,” she told The Indian Express.

When asked whether people are splitting businesses to stay below the Rs 20 lakh exemption threshold or doing cash transactions to evade scrutiny under GST, Sarna said that though the government has given a 6-month transition period to taxpayers and the enforcement authorities are refraining from taking any action, but they are keeping an eye on taxpayers on the margin of the exemption threshold and may “strike later”. “I am not rushing to do any intensive work in terms of enforcement because I want it to settle. Now this may lead a lot of people to stay cushy and think that they can do whatever they like, but my direction to my officers is ‘don’t strike now’. If you have intelligence on somebody, who I might think could be a genuine mistake, you keep collecting it and after 3-4 months, if some officer of yours tries to help them … and they don’t come into their hands because they are actually clandestinely doing things, you catch them later. You keep piling up the information but don’t strike now because I don’t want negativity right now,” she said.

Sarna said small and medium enterprises should not feel that they are being attacked just for their smaller size of business. “I don’t want to pounce; I don’t want to gloat over some small places where I feel there could be a genuine error. So have to give that much of benefit of doubt. Till such time, 6-7 months pass, and if I’ll see regularly this, particularly, some unit doing something which is clandestine, not including, not declaring and are aware … Today it’s difficult because when I am a supplier, I have the information. You are hiding it but I am the supplier. I have supplied to you and in my details I have mentioned you. Now, you may say that I am under Rs 20 lakh, and therefore, I don’t need to (file returns) but I have found that many people are supplying to you and as time goes by, and I find out that actually you should be in the net. So, I may strike later but at the moment I do not want to rush into it,” she said.

She further said that the enforcement authorities under GST have been asked to “stay alert” about assessees who are near Rs 18-19 lakh annual turnover limit to detect cases of usage of cash for GST evasion. “It’s only the people below Rs 20 lakh who may be doing these transactions and these are small fellows. Right now, we need to concentrate on the big fish and see that they come on board. As I keep telling my enforcement guys, if you seem somebody has reached Rs 18-19 lakh limit, then you need to be a little alert. There are lots of things that enforcement guys do. If I think somebody is more than Rs 20 lakh and is hiding it, I’ll know when I know his factory premises, when I see his production line, when I see the items he is producing and if he has got a name or a brand name or some small or middle fellow, I will start finding out where all this is going. And if I go backwards and if I see the supply, I’ll figure that this guy has the capacity for more than what he is declaring. These are all enforcement issues including cash which will eventually come in and enforcement guys will act on it,” she said.

She, however, said that the new GST regime needs time to settle as a lot of genuine errors, misconceptions and lack of clarity is still going on.

Giving examples of the issues reported in the two surveys done in Gujarat and Haryana, Sarna said that mostly people have reported issues with the online utility. “They are saying suppose that I am a migrated person. I migrated, but I don’t need to take registration anymore because I am below threshold of Rs 20 lakh, or I am not doing business anymore, or business not doing well. Don’t want to file returns because I don’t do business anymore. But if I have to cancel now, I need a utility. So, again it’s the problem of utility,” she said.

On the issue of slow rate of refunds to exporters, Sarna said the government has refunded Rs 200 crore of Integrated GST (IGST) paid on exports in July. “For the IGST export refund, almost Rs 200 crore has been disbursed for July. We had given commitment to start refunds from October 10. We gave Rs 26 crore on that day itself and that has gone up to Rs 200 crore,” she said. A total claim of about Rs 753 crore of IGST paid on exports was made for the month of July.

Sarna conceded that there have been mismatch issues with the refunds to exporters and they are working to provide manual refunds, in cases where the online utility is unavailable. “There were some issues. Exporters have done some mistakes in the EGM (Export General Manifest) and shipping bill. There was some mismatch. There were mismatches in EGM, shipping bill and invoices. We are looking at each of these areas. Yesterday (Wednesday), we issued a circular as far as EGMs are concerned and we have asked the field to look carefully and sort out the problem. A list of those mistakes has been given to field officers to call those exporters and ask them to make corrections,” she said.

[The Indian Express]