CBIC Dept Asked GST Wing to Identify Risky Suppliers Due to Fraud Credit

The CBIC had early received some complaints from exporters that in some cases the Integrated Good and service tax (IGST) refunds are being held for over 6 months. In this matter, the Central Board of Indirect Taxes and Customs (CBIC) recently directed the GST risk management wing to identify risky suppliers to exporters and submit the analysis report with Jurisdictional Field Officers.

Last year, the CBIC investigated and discovered a number of cases of firms receiving fake refunds on the export of goods through the Integrated Goods and Services Tax refunds Get to know about official GST refund process under GST regime as finalized by the GST Council. We have included terms and conditions of all aspects. Read more. After it, the board has taken some measures to implement checks based on stringent risk standards, and the consignment of all these types of exporters have been put in the risky category and also made sure that it will be subject to 100% customs examinations along with it their refunds have been withheld.

The CBIC had issued a Standard Operating Procedure (SOP) in the month of January this year, which need to be followed by such exporters, and now CBIC instructed the GST and Customs Zonal principal chief commissioners to send the pending verifications reports by June 5, 2020, to the DGARM.

The CBIC said that “The zonal Principal Chief Commissioners/chief commissioners of CGST and CX zones are advised to put a process in place to ensure that in future all such verifications are completed and reports sent to DGARM within maximum 3 weeks of receipt of the request of verification from DGARM,”.

Read Also: GST Impact on Export Industry in India Get to know brief details about GST Impact on the Indian Export Industry. Also read the GST impact on exports’ revenue with experts comments. Read More

The CBIC is also doing some amendment in the Standard Operating Procedure (SOP) released in January and while doing that it states that to reduce the time taken to issue the No Objection Certificate the Directorate General of Analytics and Risk Management (DGARM) will “conduct supply chain analysis without waiting for verification report from the field and share risky first and second level major suppliers with the jurisdictional CGST (Central GST) formations at the same time when the risky exporter details are shared with the CGST formations”.

Now DGRM will get such verification reports directly by the GST and customs Commissionerates and now DGRM will decide whether No Objection Certificate (NOC) will be granted or not as per the received verification reports of exporters and their suppliers.

Central Board of Indirect Taxes These types of taxes paid on Consumption by the consumer but they do not pay directly to the government (unlike income tax). For example, GST, Sales Tax, VAT, Custom Duty and Octroi Tax and Customs added that “DGARM would grant final NOC to the exporter once the verification of the identified first and the second stage risky supplier is found in order,…In case of availing of inadmissible credit by the suppliers, the GST officers will ensure due process of recovery. If the taxpayer is under the administrative control of states/UTs, the issue of recovery would be flagged to them”

Rajat Mohan, Senior Partner, AMRG & Associates in this matter said that “the exporters have a vested right of tax refunds unless they are proven guilty. He further added that “With an internal memo from the GST policy wing looping in the senior-most tax officers in a state is expected to ease the plight of exporters,”.