The government has clarified that manual checks for Integrated GST returns will apply only for ‘risky’ exporters suspected of indulging in large-scale frauds relating to Integrated Goods & Services Tax (IGST) refunds. These risky exporters account for only 3.5% of the total number of exporters.
“The Central Board of Indirect taxes and Customs (CBIC) has recently instructed its Customs and GST formations to verify the correct availment of input tax credit (ITC) by a few exporters who are perceived as ‘risky’ on the basis of pre-defined risk parameters,” the Finance Ministry said in a note.
“Only 5,106 risky exporters have been identified so far as against about 1.42 lakh total exporters. Thus, the risky exporters are only 3.5% of the total exporters.”
The Ministry added that on June 17-18, 1,436 shipping bills filed by 925 exporters were interdicted, which was a negligible amount compared with the about 20,000 shipping bills filed by roughly 9,000 exporters on a daily basis.
Exports allowed
It also said that, even for the ‘risky’ exporters, the exports were allowed immediately. Only their refunds would be released pending the verification of the ITC within 30 days.
“The new verification exercise is aimed at preventing unscrupulous exporters from defrauding the exchequer and bringing a bad name to the larger exporting community,” the government said.
“CBIC would like to assure all genuine exporters that they would continue to get their IGST refunds in a timely manner in a fully automated environment.
“Where there is an empirical basis for selection of exporters whose claims are to be scrutinised in detail, this measure should be quite a justified one,” said Abhishek Jain, tax partner at EY.
