Experts say the move will delay the process of issuing refunds
With the government detecting fraudulent refund claims by exporters, the
Central Board of Indirect Taxes and Customs (CBIC) has asked customs and
GST officers to closely verify the claims before sanctioning them.
The CBIC has also asked Director-General (Systems) to identify a list of
“risky exporters” and share it with customs and GST officers, so that an alert
can be generated for 100 per cent examination of their export consignments.
Currently, Integrated GST (IGST) refunds are issued to exporters
automatically based on shipping bills filed with customs and GST returns
filed with central tax authorities.
The refunds are issued within a fortnight of filing of returns without any
manual intervention.
Tax experts said the move to verify the refund claims would delay the process
of issuing refunds to exporters.
In a letter to field offices, the CBIC said it has observed instances of availment
of IGST refund using fraudulent input tax credit (ITC) claims by some
exporters.
“Exporters have availed ITC on the basis of ineligible documents or
fraudulently and utilised that credit for payment of IGST on goods exported
out of India. It has also been observed in several cases that there is huge
variation between the FOB (freight on board) value declared in the Shipping
Bill and the taxable value declared in GST return apparently to effect higher
IGST pay out leading to encashment of credit,” the CBIC said.
“It has been decided to verify the IGST payments through the respective GST
field formations,” the CBIC said. It said the GST policy wing will devise a standard operating procedure (SoP)
for GST officers to verify the IGST refund claims.
The GST officers will report to the Chief Commissioner of central tax in 30
days specifying whether the amount of IGST paid and claimed/sanctioned as
refund was in accordance with the law or not. The Chief Commissioner of
central tax will then share the report with customs port within five working
days.
In cases where no malpractices are detected and the ITC availed by the
exporter is in accordance with the GST law, the customs officer at the port of
export will proceed to process the IGST refund.
The CBIC said DG (systems) shall work out the suitable criteria to identify
risky exporters at the national level and forward the list of said risky
exporters to the Risk Management Centre for Customs (RMCC) and
respective chief commissioners of central
AMRG & Associates Partner Rajat Mohan said, “Increased verification and
corroboration from custom officers and central tax officers would push back
the digital initiatives of government resulting in genuine hardship for
exporters.”
Source: The Hindu Business Line, India Wednesday, 19 June 2019