CBIC said that the trade and business friendly measure was taken with the GST Council’s approval in its 39th Meeting held on March 14, to facilitate early input tax credit (ITC) and to mitigate delays in ITC refunds faced by the taxpayers, besides ensuring that fake ITC claims are not processed.
In order to save time and compliance cost for taxpayers, the Council had also agreed to enable codes that classify within the application whether the credit was availed on services and/or capital goods in certain categories, for the refund claims. Bunching of tax periods across financial years to facilitate claim of refund by exporters has also been allowed, for applications filed after March 31.
Separately, the Central Board of Direct Taxes (CBDT) said that it had issued income tax refunds worth Rs 5,204 crore to nearly 8.2 lakh small businesses since April 8, bringing relief to MSMEs.
“These income tax refunds would help MSMEs to carry on their business activities without pay cuts and layoffs in Covid-19 pandemic situations,” the Board said in a statement. It will further issue refunds of Rs 7,760 crore to proprietors, firms, corporate and trusts at the earliest possible.
The government had announced that it will issue Rs 18,000 crore as income tax and GST refunds to taxpayers to tide over liquidity issues being faced during the Covid 19 pandemic crisis.