Faster processing of Goods and Services Tax (GST) refunds could ease working capital pressures on micro, small and medium enterprises (MSMEs), particularly exporters, the Federation of Indian Micro and Small & Medium Enterprises (FISME) said. Exporters often finance raw materials, production and credit extended to overseas buyers while waiting for eligible tax refunds. The industry body said delayed refunds can compel otherwise profitable businesses to borrow money for routine expenses. This can restrict their ability to accept additional orders, expand production and maintain business operations. Smaller exporters face greater pressure because their cash remains tied up across several stages of the export cycle. Refund claims are governed by Section 54 of the Central Goods and Services Tax Act. The reforms provide for system-based processing, shorter acknowledgement timelines and risk-based provisional refunds. Under the Government’s official FAQ, the period for acknowledging refund applications or communicating deficiencies has been reduced from 15 days to 10 days. The changes also provide for automatic provisional release of 90 per cent of acknowledged refund claims in specified low-risk categories, subject to prescribed conditions. FISME said more predictable refunds could enable businesses to finance additional production cycles without relying as heavily on external borrowing. For example, receiving a refund of Rs. 1 mn 60 days earlier could save a business approximately Rs. 19,700 in interest costs, based on an annual borrowing rate of 12 per cent. The federation said the benefit could increase if enterprises use the released funds to accept and execute new orders. An official government release reported 173,350 exporting MSMEs in 2024-25, but FISME cautioned that this figure is not an estimate of GST refund beneficiaries because not all exporters file refund claims. Businesses seeking refunds under inverted duty structures form another claimant category. The actual impact will depend on processing efficiency, risk-based assessments and timely release of eligible refunds.