CBIC Issues Circular No. 131/2020 SOP for Refund Claims to Exporters

The government in its run to entirely curb tax evasion from Indian grounds is now going to put strict checks on refunds related to IGST on exports. Recently, many cases of fraud have been witnessed by the government related to credit or refunds claimed unethically on Integrated GST (exports).

In order to put a halt on such unlawful practices, the ruling has come up with the conclusion of suspending the grant of credit and refunds for suspected exporters until the complete legitimacy of their documents is proved. Exporters whose refunds are put on hold by the administration will receive a notification acknowledging the same.

For now, the percentage of exporters taken up for verification is very less as compared to the total number claiming refunds on exports. Apart from suspending the claim of credit and refunds to suspected exporters, further export consignments/shipments will be examined for 100% authenticity at custom ports.

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While the aforesaid measures are initiated by the government to curb frauds related to the credit claimed and refund on exports, the convenience of the honest exporters is taken into consideration. In the favor of the exporters, the government has decided to inform the exporters (whose refunds are suspended till verification) either through CGST or customs. To complete the verification as soon as possible, the exporters are required to fill in the relevant information of export in Annexure ‘A’ and submit the same to CGST authorities.

However, there are time boundations on CGST authority related to the investigation. The authority is compelled to complete the verification within 14 working days from the date of submission. If the verification takes more than the designated time limit then the same is notified by the officials to higher authorities.

The exporter is free to launch a complaint under grievance section if the credit/refund grant is pending for more than one month from the jurisdiction’s side.

Read the CBIC Official Circular No. 131/2020 for Details