100% physical examination of each export consignment to be gradually relaxed w.r.t. verification of IGST refund on import in case of risky exporters

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Various exporters and organizations raised the issue of repeated opening of export containers for 100% examination related to risky exporters, under the new procedure laid down in Circular 16/2019-Customs dated June 17, 2019 (“Circular 16”). Exporters have taken the plea that their cargo is getting delayed and they have to incur additional costs for carrying out re-packing.

The CBIC examined the issue and vide Circular No. 22/2019-Customs dated July 24, 2019, has clarified as under:

  • While addressing the aforesaid issue and consequent risk to revenue, Board would not like to dilute the emphasis it laid on reduction in time and cost-related with EXIM clearances.
  • Only a miniscule percentage of export consignments are being selected for examination on account of risk associated with fraudulent availment of IGST refunds.
  • Keeping in view the issues raised by trade, the requirement of 100% physical examination of each export consignment shall be gradually relaxed provided no irregularity was noticed in earlier examinations of export consignments of export entities in terms of Circular 16.
  • In order to bring easy the examination procedure, Risk Management Centre for Customs (“RMCC”) shall take into consideration the feedback received from field formations with regard to the 100% examination conducted on exports of risk based identified entities and wherever the examination has validated the declaration made in the shipping bill, RMCC may review the risk assessment and gradually taper down the percentage of physical examination. Suitable alerts based on re-evaluated risk may accordingly be inserted in the system by RMCC in such cases.

Complete Circular can be accessed at: http://www.a2ztaxcorp.com/wp-content/uploads/2019/07/Circular-No-22-2019.pdf