Exporters want quicker VAT refunds

Despite the state government's repeated efforts to expedite the VAT refund process in the state, various export promotion bodies claim that till date the accumulated refund amount pending in the state's excise department, as collected from the figures submitted by various sectors is Rs 400 crore approximately.

For example, the total outstanding VAT refund amount pending for the leather sector, starting from 2005-06 is close to Rs 80 crore per annum till date.

While for the engineering sector the total accumulated outstanding VAT refund amount from the period 2005-06 to 2007-08 is close to Rs 200 crore and for the jute export units the amount is close to Rs 10 crore.

Speaking at an interactive session organised by Federation of Indian Export Organisation (FIEO), C M Bachawat, secretary of the excise and finance revenue of the government of West Bengal, said, “We are committed to expedite the process of VAT refunds and provide complete refunds to eligible applicants, in fact we have taken up several measures like starting the online application system for VAT refunds and setting up a central VAT refund cell, we hope to disburse a substantial amount of VAT refunds by the end of 2007-08.”

However, he failed to provide any estimated amount which the state excise department will be refunding this current fiscal.

A central VAT refund cell has been set up in the state excise department some three months back to expedite the process and online application system has also been started which will help expedite the whole VAT refund process, he said.

Bachawat pointed out that compared to other states, the VAT refund amount in our state has been relatively low since the state government had amended the VAT refund policy of West Bengal several times in the course of the last three year after consulting all the various stakeholders and export bodies.

“We have made amendments and provided exemptions to various sectors in the policy in a manner that more than 80 percent of the exporters in the state do not require to file for VAT refunds in the first place”, said Bachawat.

Ramesh Kumar Agarwal, chairman of FIEO (eastern region), said, "The policy might have helped to attract a lot of investments, but in terms of implementation the government failed, as a result the VAT refund to exporters in West Bengal accumulated right from the day it was implemented and various sectors like engineering, leather, jute etc which depended on the VAT was affected"

The non refund of VAT made a dent on the working capital and forced some exporters to shift base or close shop, he said.

Exporters and various trade promotion bodies, however, claimed that they are not very comfortable with the latest online application system introduced by the state government.