‘Risky’ exporters to face action: Officials

The finance ministry is considering taking stern action against “risky” exporters who have fraudulently claimed Goods and Services Tax (GST) refunds worth Rs 2,020 crore, and are untraceable, two officials said requesting anonymity.

One official working in the finance ministry said that the government has so far identified 1,474 exporters and their refund claims were suspended. On July 18 HT reported that, the government had blocked refund claims worth Rs 1,875 crore involving 1,377 such exporters.

“However, customs officials have been sensitized to expedite refunds to genuine exporters in these difficult Covid-19 days,” the official added. He said, so far integrated GST (IGST) refunds of more than ~1.37 lakh crore have been disbursed and only about ~ 2,026 crore is pending, which is being processed as per the law. The government is using data analytics to identify “risky” exporter entities that take input tax credit fraudulently and monetise it by paying IGST and claiming a refund on that.

Imports of goods and services are treated as inter-state supplies and attract IGST.

Another officials working at the Central Board of Indirect Taxes and Customs (CBIC) said, “Feeling the heat, some fake and risky exporters are lobbying with some prominent trade associations to allege that genuine exporters are being harassed by being asked for over 1,500 documents each for conducting verification, but this is completely untrue”

The officials said data analytics by CBIC’s Directorate General of Risk Management (DGARM), which is followed by field-level verification by the officers have found 1,474 ‘risky’ exporters including seven star exporters who tried to claim IGST refund of over ~ 2,020 crore were untraceable at their declared place of business and therefore their refund has been rejected.