Twenty months since the launch of the goods and services tax (GST), tax officials under state governments are still struggling to handle the large assessees that have come into their fold, especially the service providers and small manufacturers. This has resulted in the twin issues of high revenue leakage and denial of input tax refunds to eligible taxpayers, mostly service exporters, several industry sources and analysts tracking the GST system told FE, recounting anecdotes.
Legitimate ITC refunds are being denied by the state administrators as many field officials have little experience earlier of repaying funds to the assessees. This is largely because state authorities are new to dealing with service providers.
As at the end of December 2018, while the Central tax authority was yet to disburse ITC refunds of Rs 902 crore, the corresponding amount for state tax administration was Rs 2,678 crore. When unsettled refund claimed used to be much higher earlier, the funds were mostly withheld by state officials. While ITC is mostly used by taxpayers to settle output tax liabilities along with cash payments, sections of them also claim ITC refunds; apart from exporters those who seek refunds include assesses in industries suffering from inverted duty structure like textiles.
Read more at : https://www.financialexpress.com/industry/gst-tax-officials-under-state-govts-still-struggling-to-blame-for-75-of-blocked-refunds/1456775/