Gujarat Traders Wait a Decade for VAT Refunds as GST Transition Freezes Accounts

Thousands of traders across Gujarat remain locked out of their statutory Value Added Tax (VAT) refunds nearly a decade after the tax regime was wound up.

Despite official refund orders clearing departmental stages, payments are stalled because legacy bank particulars have vanished from defunct portal architectures. Commercial tax authorities attribute the gridlock to the wholesale migration from VAT to the Goods and Services Tax framework in July 2017.

The Mechanics of Bureaucratic Paralysis

Traders file refund claims through their respective local wards, where officials process the paperwork and generate formal sanction orders. These orders are dispatched to the Accounts Branch under Joint Commissioners I and II in Ahmedabad, which operates under the administrative control of the Deputy Commissioner in Gandhinagar rather than the city's Chief Commissioner.

Once files reach the accounts wing, the systemic roadblock materialises. Because the legacy VAT portal is largely suspended, ledger profiles are unmodifiable. Traders cannot update or verify dormant bank details, and forgotten login credentials render self-service portal access impossible. Officials now demand physical affidavits to confirm bank ownership, forcing former registrants—including those who have relocated to Mumbai or Delhi—to complete manual compliance hurdles for accounts that previously received successful disbursements.

Bureaucratic Red Tape and File Cycling

The ordeal deepens for high-value claims routed through the government's GR cell and appellate authorities.

• Claims exceeding ₹25 lakhs require Deputy Commissioner clearance.
• Claims surpassing ₹50 lakhs must obtain sign-off from the Additional Commissioner in Gandhinagar.
• Audit files are routinely returned up to three times with staggered objections, extending processing timelines by two to three years.

Tax practitioners note that files sent for statutory verification are repeatedly bounced back with fresh queries rather than consolidated reviews. With cases piling up at the Additional Commissioner's office in Gandhinagar, ordinary merchants face persistent liquidity constraints over legacy dues that predate the current economic landscape.