With Punjab’s industrialist up in arms against the State Government on the issue of delayed VAT (value added tax) refunds, it would soon set up a dedicated corpus for the same.
“In order to permanently resolve the problem of VAT refunds being faced by Punjab industrialists, the State Government has decided to set up a dedicated corpus to be maintained by the Excise and Taxation Department,” said Deputy Chief Minister Sukhbir Badal on Tuesday. The corpus would be called the Punjab VAT Refund Fund.
“All the collections made by Excise and Taxation Department as advance tax will go to this corpus. The funds in this Corpus would be used to clear VAT refunds first. At the end of the month, if any funds are left in this corpus, they will be transferred to the Consolidated Fund of the State,” he added. Elaborating, Sukhbir said that on an average, the state expects to collect advance tax of Rs 200 crore per month. “On the other hand, every month, refunds amounting to Rs 100 crore are likely to accrue. So, there will be no dearth of funds, once the refund is cleared by the AETC,” he added.
He said that as of now, there is a backlog of about Rs 300 crore of refunds. The refunds will be cleared out of this corpus on first in first-out-basis, he said. “With the creation of this dedicated corpus, the entire backlog is likely to be cleared within next three months,” he added.
Deputy Chief Minister also said that industrialists had brought to his notice that once the refunds are cleared by the Excise and Taxation Department, they face harassment at the level of treasuries. “In order to resolve this problem, directions have been issued that henceforth, once the Excise Department clears a refund file, AETC will clear the refunds from this corpus fund which is outside the treasury,” he added.
“While doing so, the AETC will also fill in the bank account number of the industrialist. As a result, the refund amount cleared by the AETC will directly be credited into the bank account of the industrialist and the industrialist will not have to even go to the treasury,” he said. Adding, Sukhbir said that in the next assembly session, the necessary amendments in the VAT Act will be made and the entire system will be in place by November 15, 2013. “In view of the representations from the industrialists, Rs 75 crore was released last week to clear the pending refunds,” he added.