The government revealed that 5,106 out of 1.42 Lakh exporters are found claiming fraud IGST returns which are based on bogus invoices. Sources further say that the fraud claims by these risky exporters could exceed over 1000 Crore. On this, the government has decided to manually investigate their claims before issuing refunds to the exporters.
Genuine exporters will not suffer in the scenario, Central Board of Indirect Taxes and Customs (CBIC) have further ensured that all the GST refunds claimed by genuine exporters get processed in an automated environment and issued to them on time.
CBIC has given the instructions to its Customs and GST formations on Monday to verify the correct attainments of Input Tax Credits (ITC) of the exporters who are marked as “risky” based on the predefined risk parameters. They further quoted the instructions asking the director general (systems) to identify “risky exporters” and give the detailed report to the respective Chief Commissioner of Central Tax regarding the past IGST refunds issued to such exporters (along with bank account details in which such refunds has been disbursed). Chief Commissioner of Central Tax will then send the reports to the customs port within five working days.
CBIC says “Even for these risky exporters, the exports are allowed immediately. However, the refund would be released after the verification of ITC within the maximum of 30 days”. CBIC further announced that manual checks on IGST refunds are solely to stop the corrupt exporters from cheating for refunds. Each day about 20,000 export invoices are registered by around 9,000 exporters with minimal or no interference, added CBIC.
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“The new verification exercise is aimed at preventing unscrupulous exporters and bringing a bad name to the larger exporting community. CBIC would like to assure all genuine exporters that they would continue to get their IGST refunds in a timely manner in a fully automated environment”, said CBIC.
CBIC has also instructed RMCC to positively put alerts for all risky exporters and completely examine their export consignments and also place alerts to halt IGST refunds in such cases.
Some tax-checkers have noticed that exporters have claimed ITC on the basis of illegal documents and used that credit for payments of IGST for goods exported. Refunds now can be claimed by the exporters in only two conditions either on the basis of issuance of bonds at the time of export or paying IGST in cash on the time of export.
The customs officers will not process the refund claim if any such fraud cases are found where exporters have illegally availed ITC and utilized it for payment of IGST on exports.
