A delegation of Vidarbha Industries Association (VIA) met Union Finance Minister Nirmala Sitaraman recently and highlighted the difficulties being faced by the merchant exporters in getting ITC refund and by the directors of the strike off companies. Union Agriculture and Rural Development Minister Narendra Singh Tomar was also present on the occasion.

 

The first issue was related to Merchant Exporters, who were unable to get their refund of Goods and Services Tax (GST) paid on goods purchased in the last month of the finance year i.e March, if such goods were Exported in the next financial year. This is due to financial year closer.

 

VIA has submitted that when a merchant exporter purchases goods to be exported, in a month say in the month of March, 2019 (last month of Financial Year) is not able to export the goods in the month of March, 2019 but export these goods in the month of April, 2019 which falls in the next financial year. As the financial year in which the goods are purchased is different than the financial year in which the goods are exported the merchant exporter are not able to claim the ITC as refund in the month of March, 2019.

 

They are also forbidden for claiming the refund in the month as their have no export in that month the application in Form GST RFD-01 to the common portal can not be filed. Even though this ITC gets carry forward in the next financial year, refund cannot be claimed in next financial year. Second issue was related to Director’s feeling the heat of DIN blocked in case of Strike of Companies - Pursuant to notice under Section 248(1) (c) of the Companies Act, 2013 in March 2017, the name of many companies have been struck off from the Registrar of Companies, owing to not carrying on any business or operation for a period of two immediately preceding financial years. As a result, the names of the companies were struck off and directors attracted disqualification status even in companies other than strike off companies.

 

Following disqualification, directors of such companies are unable to comply with the statutory obligations in the companies which have ongoing business operations. They are thus left with no option but to approach the National Company Law Tribunal.

 

The company is required to file a writ–petition at NCLT which is evidently a repressive and cumbersome procedure and warrants obnoxious expenditure. Moreover, it is quite unreasonable to saddle the over – burdened Courts/Tribunals, with such trivial petitions, which are already found grappling with paucity of time under huge quantum of cases.

 

Therefore, request has been made to the Finance Minister to introduce a more cost – effective and expeditious other simplified procedure to enable these strike off companies to apply for removal of their names from the Register of Companies through regular channel u/s 248(2) of the Companies Act, 2013, and to remove disqualification from directorship. Finance Minister assured the delegation to positively resolve two issues shortly.