Agglomeration of the VAT refund is a major flaw in the VAT system which certainly pushes the future of the industry into the dark and also unnecessarily harasses the industrial units because a lot of funds are blocked in the form of refund with the government, which otherwise could be invested in business. The manufacturer needs to pay input VAT when the raw materials are bought, and it is realized till the goods are disposed-off. Under the preview of the VAT system, the dealers either setoff the input VAT against the output VAT or lodge a claim with the government for the excess input VAT. The present research work tries to explore and confirm the factors responsible for the delayed VAT refund. Five factors are extracted which were accountable for the agglomeration of the VAT refund. Conceptual factors were found to be the main factor responsible for the delayed VAT refund. The refund mechanism under the VAT regime is not very effective not only in our country, but also in the neighboring countries where the VAT system has been adopted. The second and third major factors responsible for the delayed VAT refund are 'Fraud and Tax Evasion' and 'Interstate VAT Divergence' respectively. However, the foremost objective of the VAT implementation by almost all the countries in the world is to cope with the unwanted leakage of taxes in the form of fraud and tax evasion. VAT is used as a tool to bring harmony in the taxation system of the countries. However, it could not bring uniformity in India; rather, it has caused divergence in the volume of the VAT refund in the states.

1. Associated Chamber of Commerce (ASSOCHAM). (2006). Post-VAT exporters spending more on transaction. New Delhi : ASSOCHAM.
2. Bhushan, K. (2006). Working with VAT (1st Edition, pp. 67-88). New Delhi : Pearson Education.
3. Bird, R.M., & Gendron, P.P. (1998). Dual VATs and cross-border trade: Two problems, one solution? International Tax and Public Finance, 3 (5), 429-442. DOI : 10.1023/A:1008646613637
4. Chatterjee, G., & Biswas, A. (2007). VAT Analgesia for the public or an instrument of Deprivation. The Accounting World (ICFAI), September 2007, 31-41.
5. Desai, M.A., & Hines Jr., J.R. (2002). Value-added taxes and international trade: The evidence. Retrieved from <a href=http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.198.4287&rep=rep1&type=pdf target="_blank">http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.198.4287&rep=rep1&type=pdf</a>
6. Feldstein, M.S., & Krugman, P.R. (1989). International trade effects of value added taxation. Paper No. #3163 presented at National Bureau of Economic Research Conference on International Taxation, Nassau. Retrieved from <a href=http://www.nber.org/chapters/c7211.pdf target="_blank">http://www.nber.org/chapters/c7211.pdf</a>
7. FICCI (2006). FORM C, VAT procedures and compliance stump Indian business : Survey on VAT classification of products in different states. Survey on VAT procedural and administrative hassles. Retrieved from <a href=http://.www.ficci.com/surveys/VAT survey.htm target="_blank">http://.www.ficci.com/surveys/VAT survey.htm</a>
8. Grandcolas, C. (2005). The occasional failure in VAT Implementation: Lessons for the Pacific. Asia Pacific Tax Bulletin, January/February 2005 , 6-13. Retrieved from <a href=http://unpan1.un.org/intradoc/groups/public/documents/unpan/unpan019991.pdf target="_blank">http://unpan1.un.org/intradoc/groups/public/documents/unpan/unpan019991.pdf</a>
9. Harrison, G., & Krelove, R. (2005).VAT Refunds: A review of country experience (pp. 1-43, Working Paper No.05/218). International Monetary Fund. SSRN. Retrieved from <a href=http://papers.ssrn.com/sol3/papers.cfm?abstract_id=888087 target="_blank">http://papers.ssrn.com/sol3/papers.cfm?abstract_id=888087</a>
10. IMF Survey (2006). Best practices for value-added tax refunds - How to mend the “Achilles' heel” of the VAT. IMF Survey, 35(3), 44-46. DOI:10.5089/9781451967784.023.A007
11. Keen, M. (2007). VAT attacks! International Tax and Public Finance, 14 (4), 365-381. DOI : 10.1007/s10797-007-9037-9
12. Keen, M., & Smith, S. (2007). VAT fraud and evasion: What do we know, and what can be done? (WP/07/31). International Monetary Fund. Retrieved from <a href=http://www.imf.org/external/pubs/ft/wp/2007/wp0731.pdf target="_blank">http://www.imf.org/external/pubs/ft/wp/2007/wp0731.pdf</a>
13. Kumar, S., & Bagga, T.S. (2012). An analytical study of VAT : A case study of Punjab (Ph.D. Thesis). Amritsar, Guru Nanak Dev University.
14. Lent, G.E., Casanegra, M., & Guerard, M. (1973). The value-added tax in developing countries. Staff Papers, International Monetary Fund, 20, 350 - 352.
15. Ministry of Finance. Government of India. (2005). State-level value added tax (White paper). The Empowered Committee of State Finance Ministers. On the basis of resolution adopted in the conference of the chief ministers on November 16, 1999. New Delhi, January 17, 2005.
16. Prasad, M. (2007). Introduction of value added tax in Indian states: How has the revenue performance been? (Ph.D. Thesis). Boston, Harvard University.
17. Roy, C. V. (2007, July 6). Sports units of Punjab await VAT refund. The Business Standard. Retrieved from <a href=http://www.business-standard.com/article/economy-policy/sport-units-of-punjab-await-vat-refund-107070601058_1.html target="_blank">http://www.business-standard.com/article/economy-policy/sport-units-of-punjab-await-vat-refund-107070601058_1.html</a>
18. Sharma (2005). Report presented in a national conference on VAT. New Delhi : Federation of Indian Export Organization (FIEO).
19. Shoup, C. (1988). The value added tax and developing countries. The World Bank Research Observer, 3(2), 139-156.