CBIC to expedite pending refund, drawback claims

In view to provide immediate relief to the business entities, due to COVID-19 pandemic, the Central Board of Indirect Taxes and Customs (CBIC), under the Ministry of Finance, Department of Revenue, the Government of India has launched a ‘Special Drive’ instructing the Customs officers to expedite pending refund and drawback claims, which are pending as on April 7, 2020.

The objective of this move by the CBIC is to provide immediate relief to the business entities, especially to the MSMEs, which makes it an imperative to ensure that there are no delays. All deficiency memos may be reviewed and refund/drawback may be considered on merits.

The Principal Chief Commissioner/Chief Commissioner shall monitor the performance on this front closely on a daily basis and wherever required suitably guide the officers concerned to maximise the disposal.

S V Veerramni, Chairman and Managing Director, Fourrts Laboratories said, “We welcome the move initiated by the CBIC to expedite the refund and duty drawbacks claims. It will help us to put the money back in the process of production of medicines as due to the COVID-19 lockdown the Industry is facing several issues. This comes as a relief to us. However, we request if a similar thing is also applied keeping in mind faster input tax credit from the GST authority, it will be very helpful for the exporters.”

Bhavin Mehta, Director Kilitch Drugs said, It’s a welcome step by the Government, as MSME’s are the most affected during this time, as the process is online, MSME’s will get the Duty to drawback funds directly into their account, moreover, it will help them to take care of the immediate requirement for their shortfall in Working Capital requirement and Salary payments of their workers and staff as this is the need of the hour.”

Anwar Daud, Managing Director, Zim Laboratories comments on the latest move by the CBIC and informed, “We are yet to receive over Rs. 4.82crores on account of 10 per cent held on refund filled through RFD01 (0.63 Crores since Nov17 to Mar18, 1.95 Crores in 18-19 and 2.24 Crores in Apr19 to Nov19). Also, we are waiting for a claim refund of over Rs. 3.34 crores on the monthly refund claim filled (0.18 Crore in Sep19, 2.05 Crores in Oct19 and 1.11 Crore in Nov19). The refunds are eligible from Dec19 not been considered, which will be over 2.5 crores in Dec19 and Jan20. Our over Rs. 5 crores refund from Customs on duty paid exports till Feb20. Total GST refunds will be over 15.5 Crores till March 2020.”

However, he continued and said, “The authorities have been promising since long but nothing materialises. Latest they say that it will be done the day they join office after lockdown ceases. In some cases, a few of the payments held back due to technical glitches in online applications (we being responsible) or glitches in their software. On this development, will see how effective this be for us.”

Customs refunds are made in two scenarios, first, when the exporter buys the material from the domestic market and second when it processes the importing consignments without the Advanced License. In both cases, companies can claim for the customs refunds.

The CBIC has also mentioned that though the decision to process pending refund claims has been taken with a view to provide immediate relief to the taxpayers, due diligence is to be done before granting the refund and drawbacks. All the relevant legal provisions, notifications, circulars and instructions must be followed while processing the claims. For facilitation of exporters, all communications should be done over email, wherever e-mail id of the applicant is available.

This move will be in place till April 30 and expected that during the period all refunds and drawback claims that are pending as on April 7, 2020 shall be cleared on a priority basis.

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