Numerous cases of monetisation of credit fraudulently obtained or ineligible credit through refund of Integrated Goods & Services Tax (“IGST”) on exports of goods have been detected in past few months. On verification, several such exporters were found to be non-existent in a number of cases and in all these cases it has been found that the Input Tax Credit (“ITC”) was taken by the exporters on the basis of fake invoices and IGST on exports was paid using such ITC.
The Central Board of Indirect Taxes & Customs (“CBIC”) has thus came out with a Standard Operating Procedure (“SOP”) to be followed by Exporters vide Circular No. 131/1/2020 – GST dated January 23rd, 2020 providing as follows –
In order to mitigate risk, measures have been taken to apply stringent risk parameters-based checks driven by rigorous data analytics and Artificial Intelligence tools based on which certain exporters are taken up for further verification. However, the total percentage of such exporters selected for verification is still a small percentage w.r.t to the total number of exporters. The refund scrolls in such cases are kept in abeyance till the verification report in respect of such cases is received from the field formations. Further, the export consignments/shipments of concerned exporters are subjected to 100 % examination at the customs port.
Exporters whose scrolls have been kept in abeyance for verification would be informed at the earliest possible either by the jurisdictional CGST or by Customs. To expedite the verification, the exporters on being informed in this regard or on their own volition should fill in information in the format as provided in ‘Annexure A’ to this Circular and submit the same to their jurisdictional CGST authorities for verification by them. If required, the jurisdictional authority may seek further additional information for verification. However, the jurisdictional authorities must adhere to timelines prescribed for verification.
Verification shall be completed by jurisdictional CGST office within 14 working days of furnishing of information in proforma by the exporter. If the verification is not completed within this period, the jurisdiction officer will bring it the notice of a nodal cell to be constituted in the jurisdictional Pr. Chief Commissioner/Chief Commissioner Office. After a period of 14 working days from the date of submission of details in the prescribed format, the exporter may also escalate the matter to the Jurisdictional Pr. Chief Commissioner/Chief Commissioner of Central Tax by sending an email to the Chief Commissioner concerned. The Jurisdictional Pr. Chief Commissioner/Chief Commissioner of Central Tax should take appropriate action to get the verification completed within next 7 working days.
In case, any refund remains pending for more than one month, the exporter may register his grievance at www.cbic.gov.in/issue by giving all relevant details like GSTIN, IEC, Shipping Bill No., Port of Export & CGST formation where the details in prescribed format had been submitted etc. All such grievances shall be examined by a Committee headed by Member GST, CBIC for resolution of the issue.
Access Annexures at: http://www.cbic.gov.in/resources/htdocs-cbec/gst/circular-cgst-131.pdf