The Central Board of Indirect Taxes and Customs (CBIC) specified the way of processing and sanctioning IGST refunds, upheld for clause (c) of sub-rule (4) of rule 96, transmitted to the jurisdictional GST authorities under sub-rule (5A) of rule 96 of the Central Goods and Service Tax Rules, 2017.
Under the rule, CBIC laid on the Standard Operating Procedures (SOPs) for the verification of risky exporters and their suppliers on January 23, 2020, allotted to CGST, Customs formations, and Directorate General of Analytics and Risk Management (DGARM) and SOP on May 20, 2020, provided to CGST formations and DGARM allotted for the process which is to comply for the validation referred to the risky exporters and their suppliers.
The mentioned SOP’s furnished that DGARM furnishes towards the process to comply, risky exporters and suppliers verification. The specified SOPs furnished that DGARM finds out the exporters and their suppliers on the grounds of the risk parameters which the competent authority approved and forwards the list of these exporters to the Risk Management Centre for Customs (RMCC) for placing an alert in the system.
“In such cases, the Customs field formations were required to conduct the detailed examination of the export goods of such identified exporters. Further, the jurisdictional CGST formations were required to conduct detailed verification of such identified exporters and their suppliers and forward the verification report to DGARM.
On receipt of the verification report from CGST formations, DGARM was required to take a decision for issuance of NOC or otherwise. In cases where NOC has been issued by DGARM, the same was communicated to the Customs authorities at the port of export for the release of withheld IGST refunds of the such exporter. Further, DGARM was also required to review whether the exporters can be removed from the list of identified exporters,” the CBIC expressed.
Rule 96 of the Central Goods and Service Tax Rules, 2017 revised that come into force from 1st July 2017 to furnished for withholding the IGST refund for the cases in which the verification of the credentials of the exports has been revealed on the grounds of the data analytic along with the claim of ITC via the exporter who has been acknowledged as essential prior to the refund allotment.
Towards the recent changes in the laws, some amendments would be incurred in the alert module on ICES to which advisory no 14 on 29th Sept 2022 would be provided via DG system to all the system managers. In the stated advisory, it is conveyed that a new role to put an all-India suspension on IEC or on GST Identification Number (GSTIN) of the export under the stated case to sustain the IGST refunds would be made for the DGARM officers.
The revocation option of the specified alert has been made to DGARM officers. Moreover, guidelines have been furnished via DG systems vide F. No. DGSYS/APP/ICES/GEN/41/2022 on 29th September 2022 to the formation of the customs field for the process to be complied via them for IGST refunds sustained because of the DGARM alerts on the risky exporters.
DGARM for the data analysis and risk parameters finds out the exporters in which the verification of credentials of the exporter, and claim of ITC via the exporter, would be acknowledged as essential to provide the refund. DGARM puts all India alerts on the same exporter on the Indian Customs EDI system including the reasons to place the stated alert.
After placing the alert, IGST refunds of the same exporter are to be maintained, and the information for the shipping bills furnished by these exporters where IGST scroll can not be made indeed with the causes of it is to be transmitted to GSTIN via ICEGATE for the generation of the refund claims in form GST RFD-01 as per the provisions of the sub-rule (5A) of rule 96.
Apart from that, the former cases in which the exporter seems to be risky can not be moved because of the due verification or because the receipt of the negative report is to be transmitted to GSTIN via ICEGATE for the refund generation claims in form GST RFD-01 in terms of provisions of sub-rule (5A) of rule 96.
“Such refund claims will be made available to the jurisdictional proper officer on the back-office system under the category “Any other (GST paid on export of goods)” with the remarks “Refund of IGST paid on export of goods (Refund not processed by ICEGATE)”. Further, the risk parameters, on basis of which the exporter has been identified as risky by DGARM, would be shared with the jurisdictional tax officers along with the system-generated refund claim in FORM GST RFD-01. In cases where the verification report in respect of the exporter has already been submitted to DGARM by the jurisdictional CGST authorities, the details of the same would also be shared with the jurisdictional proper officer, along with the said system generated refund claim in FORM GST RFD-01. Transmission of such IGST refunds to the jurisdictional proper officers, withheld on account of the identification of exporter as risky by DGARM, is being initiated on the portal,” CBIC stated.
Jurisdiction proper officer processes these refund claims in a way identical to the additional RFD-01 refunds furnished under the provision of rule 89 of the CGST Rules, 2017.
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It expressed “However, it may be noted that as these refund claims have been generated by the system on the basis of Shipping Bills/ Bills of Export filed by the exporter, these claims would be auto-acknowledged by the system and no Deficiency Memo in Form GST RFD-03 can be issued against such system generated Form GST RFD-01 refund claims,”
The case might be examined for verifying the ITC correctness of the exporter or his suppliers. It is for resorting to the provisions of sub-section (11) of section 54 of the CGST Act, 2017 for withholding the refund.
Feedback is needed to be furnished by the proper officer on the common portal on providing the refund sanction order in form GST RFD 06 with suggestions on whether the alert against the mentioned assesses is required to be carried on or if that could be eliminated. Within the duration, the operations for that are to be available on the system.
GSTN transmits the information for the result of processing the refund via the proper officer including the obtained feedback by the proper officer on the need for the elimination or continuation of alert to DGARM for the needed measure for the elimination or alert continuation.
The Zonal Principal Chief Commissioners/ Chief Commissioners would be asked to track the progress of the disposal of these transmitted refund claims to confirm the verification would have been performed prior to sanctioning along with the refund required to be moved within the stipulated time.
